THE  GIFT  OF 

MAY  TREAT  MORRISON 

IN  MEMORY  OF 

ALEXANDER  F  MORRISON 


THE  TARIFF 

AND 

THE  TRUSTS 


j"^^>^° 


The  Tariff  and  the 
Trusts 


BY 

FRANKLIN  PIERCE 

OF   THE   NEW    YORK    BAR 


THE  MACMILLAN  COMPANY 

LONDON  :     MACMILLAN   &  CO.,  Ltd. 

1907 
All  rights  reserved 


CoyvBiGHT    1907 
Bv  THE  MACMILLAN  COMPANY 

Set  up,  electrotypid.     Printed  January.  15107 


THB    MASON-HENHY    PRESS 
SYRACUSE,  NEW  YOBK 


HF 

Z'09\ 


PREFACE 

Some  years  have  elapsed  since  the  publication  of  a 

work  on  our  protective  tariff  system.     The  passage  of 

the  Wilson  Bill  in  1894  dampened  the  ardor  of  men 

who  had  convictions  that  the  McKinley  Tariff   was 

unjust.     After  a  full  discussion  of  the  merits  of  that 

bill,  they  saw  the  people  vote  for  a  change  of  policy 

and  they  saw  the  people's  will  defeated  through  the 
«*> 
^    action  of  a  few  recreant  Senators.     Since  that  time 

tt   other  national  issues  have  diverted  attention,  and  the 

*  Dingley  Tariff,  imposing  duties  of  nearly  fifty  per  cent.. 

upon  dutiable  imports  and  giving  rise  to  hundreds  of 

o  trusts,  has  continued  to  oppress  the  people.     The  ob- 

E  ject  of  this  volume  is  to  supply  in  simple  form  a  clear 

^  statement  of  the  flagrant  wrongs  of  that  tariff.     It  is 

u."    idle  with  such  a  tariff  existing  to  attempt  a  discussion 

<    of  the  general  question  of  free  trade.     Simplification 

is  the  keynote  to  every  public  issue  with  a  moral  core, 

and  the  simple  but  comprehensive  question  which  we 

shall   discuss  is   the  injustice   of  the  Dingley  Tariff.. 

5     Since  1867  the  prevailing  rate  of  duties  actually  paid 

upon  dutiable  imports  to  our  government  has  exceeded 

that  of  any  other  country  in  the  world.     In   recent 

years,  by  means  of  our  improved  machinery  and  intel- 


,^  fit  ^  Z^'.  f~b  rr 


Vi  PREFACE 

Hgent  labor,  we  have  been  able  to  produce  most  of 
our  highly  protected  products  cheaper  than  any  of 
our  competitors.  Prior  to  1890  competition  among 
domestic  producers  reduced  the  price  of  commodities 
considerably  below  the  highest  mark  of  the  tariff  bar- 
rier ;  but  for  the  last  seven  years  the  trusts  have  sup- 
pressed this  competition,  and  in  many  cases  are  now 
extorting  from  consumers  the  prices  which  prevailed 
for  similar  products  in  the  fifties  before  the  discovery 
of  our  rich  ore  fields  or  the  advent  of  labor-saving 
machinery  and  the  wonderful  development  of  scientific 
processes.  Taxes  for  public  purposes,  when  reason- 
able and  necessary,  are  an  evil  often  grievous  to  be 
borne  by  the  citizen,  but  a  privilege  of  excessive  taxa- 
tion by  private  corporations  corruptly  acquired  from 
government  is  simply  an  outrage. 

Our  people  are  unfortunate  in  the  manner  and  time 
of  discussing  the  tariff.  We  attempt  in  a  single  Pres- 
idential campaign  the  work  of  popular  instruction 
which  should  be  constantly  going  on.  The  people  re- 
ceive their  information  on  the  tariff  at  such  a  time 
when  feeling  runs  high  and  the  motive  of  speakers 
and  newspapers  to  mislead  them  is  strong.  The  in- 
spiring ring  of  a  beloved  party's  war-cry  or  of  a 
trusted  leader's  voice  does  not  inspire  a  condition  of 
mind  in  which  to  reason  calmly  upon  the  merits  of  the 
tariff.  There  are  Democrats  who  are  protectionists 
and  who  can  be  counted  on  to  help  block  any  reduction 


PREFACE  VII 

of  tariff  duties.  There  are  Republicans  who  deplore 
the  existence  of  the  Dingley  Tariff  and  who  agitate 
for  a  system  of  freer  trade.  I  have  therefore  sought 
in  this  volume  to  present  an  array  of  concrete  facts 
which  condemn  our  tariff  and  to  present  them  so  fair- 
ly and  so  candidly  that  my  readers,  forgetting  their 
party  alliances,  will  remember  only  that  they  are  citi- 
zens of  this  great  democratic  Republic  which  will  live 
as  long  only  as  it  secures  to  its  people  equality  of  op- 
portunity and  protection  from  oppressive  monopolies. 
Protectionists  are  wont  in  the  discussion  of  the 
tariff  to  hold  up  before  the  citizen  the  wealth  and  in- 
dustrial strength  of  our  country  as  a  proof  of  the 
benefits  of  their  system.  It  has  always  seemed  to  me 
that  our  great  natural  resources  and  industrial  strength 
presented  the  very  reason  why  a  protective  tariff'  was 
unnecessary,  and  therefore  the  reader  must  not  be 
surprised  that  I  accept  the  contention  of  protectionists 
as  to  our  superiority  in  production  and  quote  their 
words  as  the  basis  of  my  argument  against  the  Ding- 
ley  Tariff.  The  writer  who  opposes  the  despoiling  of 
the  people  by  this  species  of  legislation  is  declared  by 
protectionists  to  be  a  theorist,  an  idealist,  a  Utopian 
dreamer  or  a  doctrinaire.  Invariably  he  is  charged 
with  not  basing  his  opinion  upon  facts.  The  diffi- 
culty is  that  men  are  given  to  accepting  a  partial  pres- 
entation of  facts  for  a  complete  one.  General  deduc- 
tions drawn  from  superficial  comparisons  of  the  con- 


viii  PREFACE 

ditions  of  different  countries  are  valueless.  It  is  only 
by  a  wide  survey  of  the  tariffs  of  many  countries  and 
of  their  past  and  present  conditions  that  we  can  hope 
to  arrive  at  any  correct  conclusion  on  the  matter.  To 
the  student  the  habit  of  appraising  current  events  by 
their  relations  to  the  history  of  the  past  is  most  im- 
portant. One  who  does  not  know  the  histor}'  of  our 
tariff  from  the  earliest  days  cannot  fully  appreciate  its 
terrible  abuses  in  our  own  day.  One  who  has  not 
carefully  read  the  heroic  struggle  for  free  trade  in 
England  more  than  sixty  years  ago  has  omitted  im- 
portant history  the  reading  of  which  will  stir  the  pulse 
and  fire  the  blood  of  every  lover  of  justice.  There- 
fore I  have  not  only  given  many  concrete  instances 
and  glaring  examples  of  the  inconsistencies  and  op- 
pressions of  our  protective  system,  but  have  also  added 
historical  sketches  of  our  own  tariff  history  and  of 
that  of  England  and  Germany,  our  present  commer- 
cial rivals. 

On  such  a  subject,  especially  to  one  busily  engaged 
in  professional  work,  indebtedness  to  the  suggestions 
of  friends  and  works  of  others  is  necessarily  very 
great,  and  it  is  impossible  to  do  more  than  make  a 
general  acknowledgment  of  their  kindness  and  aid ; 
special  reference,  however,  should  be  made  to  Pro- 
fessor Taussig's  "Tariff  History  of  the  United  States," 
to  "The  Free  Trade  Movement  in  England  and  its 
Results"  by  Professor  G.  Armitage-Smith,  to  "Protec- 


PREFACE 


tion  in  Germany"   by  William   H.   Dawson,   and   to 
"The  Truth  About  the  Trusts,"  by  John  Moody. 

New  York,  November  ist,   1906. 

Franklin  Pierce. 


CONTENTS 

CHAPTER  PAGB 

I.     A  Condition.   Not  a   Theory        ....  3 

II.     The   Trusts   Resulting    From    the    Protective 

Tariff   and   Leading   to    Socialism        .  47 

III.  American    and    English    Shipping     ...  89 

IV.  Protective  Tariffs   and  Public  Virtue       .  117 
V.     A    Talk    With     Manufacturers          .        .        .  148 

VI.     A   Talk   With    Laborers 182 

VII.     A   Talk    With    Farmers 220 

VIII.     Our    Tariff    History 248 

IX.     How  England  Got  Free  Trade     ....  297 

X.     The  Tariff  in   Germany 333 

XI.     The    Remedy 366 

Index 384 


XI 


THE  TARIFF 

AND 
THE  TRUSTS 


The  Tariff  and  the  Trusts 

CHAPTER  I 

A   CONDITION,    NOT    A    THEORY 

It  has  ever  been  the  charge  of  men  who  have  profit- 
ed by  protective  tariffs  and  special  legislation  that 
those  who  oppose  such  laws  come  to  the  people  only 
with  a  theory  unsustained  by  facts.  Governor  Cum- 
mins, of  Iowa,  recently  said:  "All  the  robberies  and 
thefts  committed  by  all  the  insurance  officers  since  the 
life-insurance  business  was  originated  do  not  amount 
to  the  extortion  due  to  the  Dingley  Bill  for  one  year." 
If  he  has  stated  the  condition  correctly,  and  I  believe 
he  has,  the  most  important  consideration  is  to  get  the 
facts  which  establish  it  clearly  before  the  public,  and 
I  propose  to  place  before  my  readers  some  of  the  ter- 
rible abuses  which  have  been  caused  by  our  protect- 
ive tariffs. 

Protectionist  writers  generally  have  viewed  the 
subject  of  the  tariff  from  the  producer's  standpoint. 
The  trend  and  current  of  legislation  in  the  United 
States  for  fifty  years  has  been  in  favor  of  the  produc- 

3 


4  THE   TARIFF    AND    THE    TRUSTS 

er  and  agdinst  the  consumer,  in  favor  of  scarcity  and 
against  abundance,,  in  favor  of  dearness  and  against 
cheapness.  You  vvculd  think  from  the  current  dis- 
cussion of  economic  subjects  that  the  only  matter  of 
interest  to  the  American  people  was  the  wealth  and 
the  prosperity  of  the  great  corporations,  and  that  the 
welfare  of  the  consumers,  the  great  body  of  the  peo- 
ple, was  a  matter  of  little  importance.  It  seems  to  me 
that  it  is  about  time  for  a  full  review  of  the  question 
from  the  standpoint  of  the  consumer. 

Government  cannot  at  one  and  the  same  tim'C  be 
a  fountain  of  generosity  to  the  manufacturer  and  of 
justice  to  the  consumer.  Privilege  in  any  country  is 
not  for  the  many,  but  for  the  few,  for  the  simple  rea- 
son that  when  privilege  is  'expanded  to  the  consumers, 
who  are  the  entire  body  of  the  people,  it  is  no  longer 
privilege.  The  richness  of  the  soil  and  of  mineral 
deposits  and  the  natural  advantages  in  our  country 
have  made  the  lot  of  man  so  fortunate,  and  the  abso- 
lute freedom  of  trade  between  our  states  and  terri- 
tories has  tended  to  mitigate  the  burdens  of  protection 
so  greatly,  that  the  ordinary  man,  absorbed  in  his 
work,  heeds  but  little  the  extortions  which  protective 
tariffs  impose  upon  him  until,  perchance,  hard  times 
come  and  he  feels  the  sting  of  want.  Again,  our 
newspapers  have  given  so  much  prominence  in  recent 
years  to  great  fortunes  rapidly  accumulated,  that  the 
body  of  the  people  have  become  great  admirers   of 


A    CONDITION,    NOT    A    THEORY  5 

wealth  and  have  come  to  measure  the  greatness  of 
our  country  and  its  prosperity,  not  by  an  increase  in 
the  enjoyments  of  comfort  on  the  part  of  the  masses 
of  the  people,  but  rather  by  the  rapid  advancement  of 
the  few  who  dazzle  them  by  the  brilliancy  of  their  suc- 
cess. We  are  apt  to  regard  such  success  as  a  sign  of 
national  prosperity  without  giving  a  moment's  con- 
sideration to  its  cost  to  the  many.  The  result  is  to 
rate  low  the  rights  of  the  whole  people  and  to  rate 
high  the  interests  of  a  class. 

The  theory  upon  which  the  Hamilton  Tariff  of  1790 
was  imposed  and,  in  the  main,  all  subsequent  tariffs 
until  the  Walker  Tariff  of  1846,  was  that  the  industry 
of  the  country  was  largely  agricultural,  and  that  it 
was  of  public  importance  that  we  have  a  diversity  of 
industries,  and  to  that  end  infant  manufactures  should 
be  aided  by  the  law  until  they  were  sufficiently  estab- 
lished to  be  able  to  compete  with  foreign  industries. 
The  Morrill  Tariff,  however,  enacted  in  the  midst  of 
the  Civil  War,  sprang  directly  from  the  necessities  of 
government  for  revenue,  and  the  duties  imposed  upon 
foreign  imports  by  that  tariff*  have  been  increased  by 
each  new  tariff,  with  one  exception,  since  enacted. 
But  a  marvelous  transformation  and  re-organization 
of  industry  has  come  within  the  last  thirty  years,  and 
the  result  is  that,  as  has  been  well  said,  we  have  "no 
more  need  for  protection  now,  than  a  candidate  for 
Congress  has  need  of  a  baby's  bottle."     Our  superior- 


6  THE   TARIFF    AND   THE    TRUSTS 

ity  over  any  other  people  in  the  world  in  manufactur- 
ing has  been  attained  during  the  last  thirty  years 
through  the  following  factors : 

First : — The  energy  and  enterprise  of  our  people. 

Second : — Our  inventive  talent  and  the  marvelous 
increase  in  labor-saving  machinery. 

Third : — The  bountiful  supply  of  food  and  raiment 
for  the  support  of  workmen,  and  the  unlimited  stores 
of  iron  ore,  copper,  lead  and  other  minerals  as  the 
raw  material  of  manufacturing. 

Fourth : — Low  tax  rate  as  compared  with  our  chief 
competitors  in  manufacturing,  thereby  lessening  the 
burdens  of  industry. 

It  may  be  that  in  some  respects  we  overestimate  our 
superiority  to  European  people,  but  there  is  one  respect 
in  which  our  superiority  to  them  never  has  been  appre- 
ciated fully  by  our  people.  We  have  the  most  un- 
ceasing and  resistless  energy  and  activity  ever  found 
in  any  country  in  all  history.  Our  American  Yankee 
and  his  descendants  have  developed  a  degree  of  busi- 
ness capacity  never  known  elsewhere  among  men. 
As  to  our  people  of  foreign  birth,  every  reader  will 
appreciate  that  it  is  only  the  bravest  and  the  strongest 
and  the  boldest  who  push  out  from  their  own  country 
and  brave  the  perils  of  the  sea  and  of  the  strange  land, 
and  among  these  it  is  only  the  best  who  persist  and 
become  residents  and  citizens.  These  men  bring  the 
accumulated  experience  of  their  own  countries  crys- 


A    CONDITION,    NOT   A   THEORY  7 

tallized  into  ideas  with  them,  and  so  we  gather  as  the 
common  property  of  our  American  people  the  opinions, 
the  customs  and  the  traditions  of  all  races,  and  thereby 
become  a  sort  of  mental  clearing-house  of  the  whole 
world.  Every  ambitious  and  adventurous  tendency 
of  our  people  is  fostered  as  in  a  forcing-house  by  the 
restless,  striving  spirit  that  pervades  the  whole  atmos- 
phere of  American  life.  Where  the  men  of  other 
countries  walk,  we  run.  Where  they  find  fault,  we 
cry,  "Don't  grumble,  boost."  Where  they  are  con- 
tented to  have  their  day's  work  equal  any  former  one, 
we  aim  to  beat  the  record.  In  England  the  laboring 
men  are  hostile  to  new  machinery,  do  not  give  their 
employers  the  benefits  of  their  discoveries,  and  seem 
to  believe  that  the  employment  of  machinery  is  hostile 
to  their  interests.  In  Germany  the  laboring  men  are 
slow,  plodding,  methodical,  without  inventive  talent, 
bound  closely  by  traditions.  In  our  country  our 
native  workingmen  are  the  most  intelligent,  the  most 
inventive,  the  most  energetic  which  the  world  has  ever 
produced,  while  our  citizens  of  foreign  birth,  cut  off 
from  all  their  European  surroundings,  depending  up- 
on their  own  energies  for  success,  breaking  with  all 
the  traditions  of  their  country,  are  exhilarated  and  in- 
spired by  the  spirit  of  action  which  pervades  the  very 
air,  and  soon  rank  among  our  best  workmen.  The 
actual  per  capita  production  of  the  operative  in  the 
factories  of  this  country,  as  will  be  shown  in  future 


8  THE   TARIFF   AND    THE    TRUSTS 

chapters,  is  at  least  twice  as  great  as  in  the  factories 
of  any  other  country  on  the  face  of  the  earth. 

But  the  intelligence  and  industry  of  our  workmen 
are  hardly  to  be  compared  in  results  with  the  marvel- 
ous increase  in  the  use  of  labor-saving  machines  in 
this  country  during  the  last  forty  years.  From  the 
First  Annual  Report  of  the  United  States  Commis- 
sioner of  Labor,  published  about  fifteen  years  ago,  it 
appears  that  for  a  period  of  a  few  years  before  that 
date  new  machinery  in  the  making  of  agricultural  im- 
plements had  displaced  fully  fifty  per  cent,  of  the 
manual  labor  employed  in  that  industry.  In  the  man- 
ufacture of  boots  and  shoes  the  efficiency  of  labor  had 
been  increased  in  a  short  time  more  than  fifty  per 
cent.  The  Goodyears'  sewing  machine  for  turned 
shoes,  with  one  man,  sews  250  pairs  in  one  day.  It 
would  require  eight  men,  working  by  hand,  to  sew 
the  same  number  in  the  same  time.  By  the  McKay 
machine  a  single  operator  could  handle  300  pairs  of 
shoes  daily,  where,  without  the  machine,  he  could 
handle  but  five  pairs  in  the  same  time.  In  the  man- 
ufacture of  brooms  nine  men,  aided  by  improved 
machinery,  could  turn  out  1,200  dozen  brooms  weekly, 
while  before  the  invention  seventeen  skilled  men  were 
only  able  to  manufacture  500  dozen  in  the  same  time. 
In  power  machinery  a  weaver  formerly  tended  a  single 
loom  at  a  time,  but  in  a  modern  cotton  factory,  two 
operatives  run  2,000  spindles  at  the  rate  of  thousands 


A    CONDITION,    NOT    A    THEORY  9 

of  revolutions  a  minute.  In  the  days  of  the  single- 
spindle  handle  wheel,  one  spinner,  working  56  hours 
continuously,  could  spin  five  hanks  of  No.  32  twist, 
but  with  one  pair  of  self-acting,  mule-spinning  ma- 
chines, having  124  spindles,  one  spinner,  with  the  as- 
sistance of  two  small  boys,  could  produce  55,098  hanks 
of  No.  32  twist  in  the  same  time.  Mr.  Wright,  writ- 
ing, as  we  have  said,  some  sixteen  years  ago  and  tak- 
ing his  facts  from  the  first  report  of  the  Labor  Bureau, 
said  that  it  would  require  from  50,000,000  to  100,000,- 
000  persons  in  this  country  working  under  the  old 
system  to  do  the  work  performed  by  the  workers  of 
to-day  with  the  aid  of  machinery.  But  the  invention 
and  use  of  machinery  has  greatly  improved  since  the 
times  described  by  Mr.  Wright.  In  a  Connecticut 
factory  70  machines,  directed  by  one  machinist,  three 
operatives  and  one  boy,  produce  7,500,000  pins  all 
placed  in  papers  and  ready  for  sale  in  one  day.  One 
hundred  years  ago  a  single  man  could  only  make 
4,800  pins  in  a  day,  while  to-day  he  makes  1,500,000. 
The  Nasmyth  hammer  is  handled  so  deftly  as  to  break 
an  egg  shell  or  crush  hundreds  of  thousands  of  tons 
of  molten  iron.  The  compressed  air  drill,  which  years 
ago  could  only  strike  25  blows  a  minute,  strikes  500 
blows  to-day.  The  excavators  for  removing  the  iron 
ore  from  the  earth,  the  electric  cranes,  the  immense 
transfer  tables  and  gigantic  machinery  of  the  steel  plate 
mills,  all  handle  hundreds  of  tons  weight  as  lightly  as 


10  THE    TARIFF   AND   THE   TRUSTS 

you  toss  a  toy.  In  the  metal  working  art,  wire-draw- 
ing, sheet-metal  making,  forging,  the  making  of  tools, 
springs,  tin  cans,  needles,  hooks  and  eyes,  nails  and 
tacks,  automatic  machines  do  the  work.  The  molded 
trimmings,  paneled  doors,  carved  mantels  and  turned 
balustrades  of  our  houses  to-day  are  all  made  by 
machinery  and  at  an  insignificant  cost ;  while  clothes- 
pins, wood-trays,  tooth-picks,  matches,  boxing  ma- 
chines, corks,  umbrella  sticks,  screw-driving  machines, 
box-nailing  machines,  cigar  boxes,  paper  and  wooden 
boxes  and  a  hundred  other  matters  of  like  small  kind 
are  done  almost  entirely  by  machinery.  We  have  the 
machines  and  we  use  them.  It  is  not  an  uncommon 
event  for  our  manufacturers  after  installing  costly 
machinery  to  tear  it  out  and  send  it  to  the  scrap  heap 
on  learning  of  something  better.  The  increase  in  the 
horse-power  used  in  manufacturing  between  1890  and 
1900  was  ninety  per  cent.  According  to  the  census 
report  of  1900  about  20,000,000  horse-power  is  em- 
ployed in  manufacturing.  Marvelous  possibilities  in 
manufacturing  are  opening  up  by  the  use  of  electricity. 
One  man,  by  pressing  a  button  or  turning  a  knob,  ac- 
complishes to-day  tasks  which  500  men  would  have 
found  it  difficult  to  accomplish  even  ten  years  ago. 
However,  it  may  be  said  that  these  wonderful  labor- 
saving  machines  are  the  common  heritage  of  mankind 
and  are  found  in  all  countries  alike,  and  therefore  do 
not  insure  us  superiority  over  other  countries  in  manu- 


A    CONDITION,    NOT    A   THEORY  II 

facturing.  This  is  not  so.  We  employ  labor-saving 
machines  to  an  extent  unknown  in  any  other  country. 
Under  our  United  States  patent  law  a  patent  can  be 
granted  only  for  a  new  invention,  while  in  most  of  the 
European  countries  it  is  not  essential  to  the  procuring 
of  the  grant  that  the  invention  is  a  new  one.  Taking 
into  account  this  fact,  observe  our  wonderful  lead  in 
the  issuing  of  patents.  Since  the  beginning  of  the 
American  patent  system  in  1791,  and  before  1900, 
650,123  letters  patent  had  been  issued.  More  patents 
have  been  issued  to  American  patentees  than  have  been 
issued  to  Great  Britain  and  France  combined.  More 
patents  during  that  period  have  been  issued  in  this 
country  by  30,000  than  were  issued  in  all  time  to  Great 
Britain,  Belgium,  Germany,  Austria-Hungary  and 
Spain  combined.  The  following  table  will  give  the 
number  of  patents  respectively  issued  prior  to  Janu- 
ary I,  1900: 

United    States    650,123 

France      308,558 

England     278,129 

Belgium      IS4,IS5 

Germany     126,114 

Austria-Hungary     82,933 

Canada     68,510 

Italy-Sardinia     49,990 

Spain     . , '22,314 

We  not  only  use  the  greater  number  of  machines, 
but  we  have  specialized  labor  by  carrying  to  the 
farthest  extent  of  any  people  in  the  world  the  employ- 
ment of  a  single  man  at  a  single  process  of  the  work. 


12  THE    TARIFF   AND   THE    TRUSTS 

The  whole  struggle  for  supremacy  in  manufacturing 
to-day  is  in  the  subdivision  of  labor  and  the  use  of  the 
dynamo  and  automatic  machines  on  the  one  hand  and 
a  greater  proportion  of  hand  labor  upon  the  other. 
In  both  respects  we  lead  the  world,  and  in  our  facto- 
ries there  is  shown  the  greatest  ability  in  the  saving  of 
labor  and  its  expansion.  Three  or  four  years  ago,  a 
commission  representing  the  trades  unions  of  Great 
Britain,  known  as  The  Moseley  Commission,  made  a 
careful  investigation  as  to  our  methods  of  manufactur- 
ing and  made  a  report  of  the  results  of  their  investi- 
gation. I  produce  a  question  put  to  them  and  their 
answers  thereto: 

Question 

Do  you  consider  American  factories  better  equipped 
for  production  than  English? 

Answers 

Blast- furnacemen — Yes,  very  much  better. 
Iron-founders — There  is  not  a  great  deal  of  difference, 

but  what  little  there  is  is  in  favor  of  the  Americans. 
Iron  and  Steel  Workers — There  is  no  doubt  that  the 

leading    mills    of    American    manufacture    are    far 

ahead  of  our  own  best  mills  in  their  arrangement 

and  output. 
Engineers — In    some    respects    American    workshops 

are     better     equipped     than     English.      They     are 


A    CONDITION,    NOT   A   THEORY  I3 

equipped    with    a    greater   variety  of    special    tools 
made  for  special  work  and  repetition  work. 

Shipbuilders  and  Boilermakers — The  equipment  of 
ship-yards  and  shops  in  other  ways,  that  is  in 
machinery,  it  not  better  than  in  Great  Britain ;  in 
fact,  better  machinery  can  easily  be  found  in  the  old 
country. 

Shipwrights — Speaking  generally,  and  applying  the 
question  as  to  ship-yards,  I  do  not  think  so. 

Sheffield  Cutlers — Yes.  There  is  a  greater  use  of 
machinery  and  no  expense  is  spared  to  secure  any 
new  device  that  will  increase  the  output. 

Midland  Metal  Trades — Yes. 

Cotton  Spinners — The  only  advantage  is  that  a  much 
better  material  is  used. 

Cotton  Weavers — American  cotton  mills  are  well 
equipped. 

Boot  and  Shoe  Operatives — Some  are,  and,  on  the  oth- 
er hand,  many  are  not.  The  employers  in  America 
do  not  hesitate  to  invest  in  new  machinery,  and  if 
it  does  not  come  up  to  expectations,  they  put  it 
aside.     Any  fresh  idea  is  worked  for  all  it  is  worth. 

Leather  Workers — Yes. 

Paper-makers — Yes. 

We  are  the  greatest  producers  in  the  world  of  iron 

ore,  of  pig  iron,  of  iron  and  steel  manufactures,  of 

hardware,  of  copper,  of  lead,  of  petroleum,  of  borax, 

of  cotton,  of  corn,   and  of  wheat.     Our  deposits  of 


14  THE    TARIFF   AND   THE    TRUSTS 

iron  ore  are  probably  more  extensive  than  those  of  all 
the  rest  of  the  world  combined.  The  United  States 
Steel  Company  and  James  J.  Hill  and  the  interests  he 
controls,  own  or  lease  the  great  iron  ore  deposits  of 
the  Lake  Superior  regions.  The  United  States  Steel 
Company  controls  eighty  per  cent,  of  these  deposits, 
and  Mr.  Schwab  testified  before  the  Industrial  Com- 
mission that  these  deposits  amounted  to  500,000,000 
tons,  and  that  if  they  sold  their  ore,  it  ought  to  be 
sold  at  a  profit  of  $2  per  ton,  the  modest  sum  of 
upwards  of  $1,000,000,000.  Pig  iron  is  the  raw 
material  of  the  entire  iron  and  steel  industry,  and  it  is 
the  barometer  of  general  business,  indicating  the  con- 
fidence or  distrust  of  all  the  trades.  In  1905  our 
production  was  nearly  23,000,000  tons  of  pig  iron.  In 
the  month  of  March  last,  we  produced  2,165,632  tons 
of  pig  iron,  as  much  as  that  produced  by  any  other 
two  countries.  At  the  present  rate  of  production  it 
is  estimated  by  a  writer  in  the  Iron  Age  that  we  will 
produce  30,000,000  tons  of  pig  iron  during  the  present 
year.  In  1895  the  United  States  for  the  first  time 
produced  more  than  half  the  world's  total  output  of 
copper.  The  estimated  production  of  1905  was  of  the 
value  of  943,000,000  pounds,  an  increase  over  the 
prior  year  of  130,000,000  pounds.  We  produced  last 
year  340,000  tons  of  lead,  and  in  1904  more  than  one- 
half  of  the  petroleum  produced  in  the  world,  the  whole 
production  of  petroleum  being  9,303,000,000  gallons, 


A    CONDITION,    NOT    A   THEORY  1 5 

the  production  of  the  United  States  alone  being  4,916,- 
000,000  gallons.  We  produce  more  than  one-half  of 
all  the  cotton  and  more  than  one-half  of  all  the  corn 
grown  in  the  world.  With  such  production  of  miner- 
als and  such  supplies  of  cotton  and  corn,  is  there  any 
doubt  about  there  being  a  sufficient  basis  for  our  in- 
dustrial leadership? 

Even  under  our  existing  national  expenditure,  which 
amounts  to  over  $400,000,000  more  during  the  last 
four  years  than  in  an  equal  period  immediately  prior 
thereto,  the  burden  of  national  taxes  in  ratio  to  product 
does  not  exceed  above  $7  per  head,  or  about  three  and 
one-half  per  cent,  upon  the  value  of  the  entire  national 
product  at  its  point  of  export  and  consumption ;  while 
in  the  competing  manufacturing  countries  of  Great 
Britain,  France,  Germany  and  the  Netherlands,  this 
burden  ranges  from  $12  to  $18  per  head.  It  is  $18 
in  the  United  Kingdom,  $17  in  France,  and  about  $12 
each  in  Germany,  Belgium,  and  Holland,  and  amounts 
to  at  least  seven  to  fifteen  per  cent,  of  their  product. 
Our  people  can  make  a  net  profit  of  four  or  five  per 
cent,  upon  our  entire  national  product  before  their 
competitors  in  the  manufacturing  states  of  Europe 
have  been  able  to  pay  their  taxes. 

All  the  world  recognizes  our  easy  industrial  supe- 
riority. M.  Leroy-Beaulieu,  the  eminent  French  writ- 
er, in  his  recent  work,  "The  United  States  in  the 
Twentieth  Century,"  based  upon  our  census  report  of 


l6  THE   TARIFF   AND   THE    TRUSTS 

1900,  says :  "There  can  be  no  question  of  the  industrial 
"primacy  which  she  has  held  probably  since  an  epoch 
"midway  between  1880  and  1890.  Yet,  curiously 
"enough,  the  proportion  of  the  population  occupied  in 
"industrial  pursuits  is  much  less  than  the  proportion 
"of  the  population  similarly  employed  in  England, 
"Germany  or  France.  .  .  .  Absolutely,  as  well  as  rel- 
"atively,  the  number  of  people  in  Great  Britain  en- 
"gaged  in  industry  is  much  higher  than  the  number  of 
"people  so  engaged  in  the  United  States,  although  the 
"value  of  the  goods  manufactured  by  the  former  is 
"not  much  more  than  half  that  of  the  goods  made  by 
"the  latter.  ...  It  can  be  explained  only  on  the  as- 
"sumption  that  the  American  workingman  works  hard- 
"er  than  the  workingmen  of  other  countries,  or  that  he 
"receives  more  efficacious  assistance  from  machinery, 
"or  that  both  these  conditions  prevail.  .  .  .  We  are 
"perfectly  justified  in  concluding  from  them  that  the 
"work  of  an  American  workman  is,  on  the  average, 
"more  productive  than  that  of  the  British  working- 
"man,  and,  a  fortiori,  than  that  of  any  other  working- 
"man  in  the  world.  .  .  .  American  manufacture, 
"which,  although  of  the  most  recent  development,  has 
"become  for  the  reasons  just  stated  the  most  powerful 
"in  the  world,  may  be  said  to  typify  modern  manu- 
"facture  conducted  under  the  most  favorable  condi- 
"tions.  The  value  of  the  products  of  manufactures 
"has   increased    more   than    six-fold    during   the   last 


A    CONDITION,    NOT    A    THEORY  1/ 

"forty  years,  while  at  the  same  time  the  number  of 
"workmen  employed  has  less  than  quadrupled.  Not 
"only  have  the  great  number  of  laborers,  in  propor- 
"tion  to  output,  greatly  decreased,  but  the  number  of 
"manufacturing  plants  in  1900  in  the  steel  industry 
"and  in  the  plants  building  agricultural  machinery 
"have  actually  decreased  in  number,  though  the  capital 
"employed  has  been  multiplied  many  fold.  .  .  .  No 
"matter  what  may  happen,  the  American  iron  and 
"steel  industry  in  particular,  will  remain  the  first,  the 
"most  powerful,  and  the  most  progressive  of  all  the 
"iron  and  steel  industries  in  the  world." 

Candidly,  under  the  conditions  described,  can  pro- 
tection in  the  United  States  be  anything  else  but  a 
crutch  for  limping  incapacity,  or  a  means  of  extortion 
on  the  part  of  the  powerful  combinations  which  take 
advantage  of  the  tariff  ?  The  inevitable  result  of  such 
conditions  in  a  country  where  there  is  no  interference 
with  exchange  between  individuals  and  other  coun- 
tries is  an  increased  and  an  increasing  abundance  of 
all  the  necessaries  of  life,  and  this  is  only  the  natural 
result  of  such  efficient  labor  as  we  have  and  our  use 
of  labor-saving  machinery.  But  what  is  the  existing 
condition?  Dun's  Commercial  Agency,  which  all  will 
admit  has  no  reason  to  exaggerate  the  facts,  for  many 
years  has  been  carefully  collecting  data  showing  the 
per  capita  cost  of  living  under  seven  different  heads — 
bread-stuffs,  meats,  dairy  and  garden  products,  other 


l8  THE   TARIFF    AND    THE    TRUSTS 

food,  clothing,  metals,  and  miscellaneous.  The  sum 
of  the  totals  of  these  give  us  what  we  may  call  the  per 
capita  wholesale  cost  of  living  each  year,  which  is  very 
much  lower  than  the  retail  or  actual  cost,  and  does  not 
include  rent,  recreation  or  luxuries.  It  does  include 
whiskey  and  tobacco.  According  to  Dun's  figures,  the 
per  capita  wholesale  cost  of  living  July  i,  1897,  was 
$72,455;  January  i,  1906,  $104,464;  June  i,  1906, 
$106.794 — making  the  cost  of  living  on  June  i,  1906, 
47.4  per  cent,  higher  than  July  i,  1897.  These  are  only  a 
few  simple  figures,  but  it  is  sometimes  interesting  to 
have  the  painful  testimony  of  our  weekly  bills  con- 
firmed by  statistics,  and  no  elaborate  exhibit  could 
carry  a  more  convincing  indictment  of  the  oppression 
of  monopoly.  At  this  rate  of  increase  we  will  soon 
have  to  rate  life  itself  among  the  luxuries. 

By  ingenious  methods  a  few  hundred  men  have 
destroyed  our  chances  for  cheap  commodities,  and 
have  been  able  to  take  the  consumers'  money,  without 
their  knowing  it,  under  the  specious  guise  of  a  protect- 
ive tariflf.  We  imported  in  the  year  ending  July  i, 
1905,  $570,000,000  of  goods  upon  which  import  duties 
were  paid.  The  average  ad  valorem  rate  of  duty  on 
these  was  45.24  per  cent.,  but  during  the  same  period 
the  amount  of  our  domestic  commerce — that  is,  largely 
of  products  raised  upon  our  soil,  dug  from  our  mines 
and  manufactured  in  our  factories,  was  about  $20,000,- 
000,000,   thirty-five  times  the  amount  which   w"e  im- 


A    CONDITION,    NOT    A    THEORY  I9 

ported.  Now  observe  carefully,  what  the  tariff  allows 
the  home  producer  to  do.  The  purchasers  of  the 
$570,000,000  of  imports  pay  into  the  Treasury  of  the 
United  States  an  average  duty  of  45.24  per  cent. ;  while 
the  domestic  producer,  by  reason  of  the  tariff  restrict- 
ing foreign  importations,  raises  the  price  of  like  prod- 
ucts up  to  the  duty  line,  and  actually  sells  a  consider- 
able proportion  of  the  $20,000,000,000  of  domestic 
products  at  a  price  enhanced  by  the  amount  of  the  tariff*. 
This  will  be  treated  of  more  fully  in  the  succeeding 
chapter.  It  is  sufficient  for  the  present  to  say,  that  for 
fifty  years,  the  United  States  Government  has  been 
picking  out  favorites  and  bestowing  upon  them  special 
privileges  through  the  tariff,  enabling  them  to  sell  their 
goods  to  the  people  of  the  United  States  at  a  price  in- 
creased by  nearly  the  amount  of  the  tariff,  notwith- 
standing the  fact  that  during  that  period  through  the 
use  of  machinery  the  cost  of  production  has  been  re- 
duced in  many  cases  to  a  fiftieth  part  of  what  it  was 
before  i860.  Yet  to-day,  under  this  iniquitous  system, 
the  producer  has  been  allowed  to  continue  the  prices 
of  commodities  as  they  existed  fifty  years  ago,  and  to 
absorb  the  results  of  his  countrymen's  labor  to  the 
amount  of  billions  of  dollars. 

A  few  illustrations  of  how  these  favorites  of  gov- 
ernment have  been  allowed  to  incorporate  into  the 
price  of  the  product  the  amount  of  the  tariff*  will  be 
pertinent.     From  the  year  1867  onward  the  duties  on 


20  THE    TARIFF    AND    THE    TRUSTS 

manufactured  woolen  goods  have  averaged  over  80 
per  cent,  and  during  the  period  covered  by  the  Dingley 
and  AIcKinley  Tariffs  the  consumers  of  woolen  manu- 
factures from  abroad  have  had  to  pay  a  tax  of  no  less 
than  an  average  ad  valorem  duty  of  92  per  cent.  'Sir. 
Charles  R.  Miller,  the  'editor  of  the  New  York  Times, 
on  the  20th  day  of  April,  1900,  in  an  address  before 
the  American  Academy  of  Political  and  Social  Science, 
at  Philadelphia,  said:  "If  the  axe  of  horizontal  reduc- 
tion were  laid  in  that  spirit,  not  at  the  root,  but  at  the 
tops  of  the  Dingley  Tariff,  it  would  be  strewn  with 
the  brushwood  of  unrighteous  surplusage  from  many 
lofty  schedules ;  and  the  woolen  schedule  that  kisses 
the  very  heavens  with  its  audacious  rates  of  289  per 
cent.,  235  per  cent.,  195  per  cent.,  and  184  per  cent., 
pierces  the  blue  vault  with  one  lone  projection  of 
379.94  per  cent.,  and  carries  an  average  impost  of 
86.54  per  cent.,  would  emerge  from  the  visitation  in  a 
truncated  and  lopped-off  condition  that  would  evoke 
loud  cries  from  the  beneficiaries  of  those  sinful  taxes." 
Excepting  for  the  three  years  1894  to  1897,  during 
which  the  Wilson  Tariff  was  in  operation,  high  duties 
have  been  imposed  on  imported  wool  averaging  about 
44  per  cent,  during  37  years,  and  averaging  during  the 
existence  of  the  present  tariff  not  less  than  52  per 
cent. — all  for  the  purpose  of  protecting  the  flock- 
masters  of  Montana,  Washington,  Idaho  and  Wyo- 
ming who  pasture  their  sheep  over  great  ranges  where 


A    CONDITION,    NOT    A   THEORY  21 

these  "hoofed  locusts,"  as  they  are  called,  are  destroy- 
ing the  very  soil,  denuding  the  hills  of  trees,  and  thus 
impairing  the  patrimony  of  the  nation.  The  total 
value  of  our  wool  clip  rarely  exceeds  $60,000,000, 
about  one  and  one-half  per  cent,  of  the  total  agricul- 
tural output  of  the  country.  One  of  the  curiosities  of 
this  tarifif  on  wool  is  that  the  duty  on  wool  imported 
washed  is  twice  the  amount  to  which  it  would  be  sub- 
jected if  imported  unwashed;  while  the  duty  on  wool 
which  is  imported  scoured  is  actually  three  times  that 
which  is  levied  on  the  unwashed  material,  making  the 
test  a  question  of  soap  and  water  and  putting  a  pre- 
mium on  dirt  and  disease.  Then  the  government,  inas- 
much as  it  has  given  the  herders  of  sheep  this  high 
duty,  gives  to  the  manufacturers  of  wool  a  duty  run- 
ning all  the  way  from  80  to  250  per  cent,  to  counter- 
balance the  duty  on  wool.  The  duty  on  woolen  goods 
under  the  Hamilton  Tarifif  of  1790  was  about  15  per 
cent.  By  the  Act  of  1824  it  was  raised  to  30  per  cent, 
in  the  first  instance  and  to  ^t,  1-3  per  cent,  after  1825. 
By  1828  the  manufacture  of  woolen  cloth  in  this  coun- 
try, according  to  Professor  Taussig  in  his  work 
"Protection  to  Young  Industries,"  had  become  secure- 
ly established.  When  the  tarifif  of  1828  was  in  prep- 
aration a  body  of  New  England  manufacturers 
visited  Washington.  Of  their  statements  before  the 
Congressional  Committee  on  Ways  and  Means,  Pro- 
fessor Taussig  says :  "The  opinion  was  expressed  by 


22  THE   TARIFF   AND   THE   TRUSTS 

several  that  the  mere  cost  of  manufacturing  was  not 
greater  in  the  United  States  than  in  England.  That 
the  American  manufacturer  could  produce  at  as  low 
prices  as  the  English  if  he  could  obtain  his  wool  at  as 
low  prices  as  his  foreign  competitor."  Nearly  eighty 
years  after,  for  the  purpose  of  benefiting  a  few  wool 
growers  in  the  West  and  a  body  of  woolen  manufac- 
turers in  the  East,  we  have  imposed  three  times  the 
duty  which  existed  in  1824.  In  England  the  consump- 
tion of  wool  per  head  has  been  steadily  increasing  for 
fifty  years.  In  the  United  States  the  quantity  of  wool 
on  the  backs  of  our  protected  population  is  decreas- 
ing year  by  year.     Here  are  the  cold  facts: 

Total  U.    S.  wool         Imports   into  U.   S. 
consumption.  of  woolen  goods. 

Population  lbs.  dols. 

1886     57,000,000 424,000,000 41,000,000 

1903     80,000,000 461,000,000 19,000,000 

The  quantity  of  wool  consumed  in  our  mills  in  1900 
was  only  nine-tenths  of  that  consumed  in  1890,  and 
was  about  20,000,000  pounds  less  than  was  used  in 
1880,  while  the  quantity  of  cotton  used  was  2,000,000 
pounds  more  than  was  used  in  1890.  The  quantity 
of  shoddy  used  in  the  making  of  woolen  goods  shows 
an  increased  consumption  of  about  15,000,000  pounds 
during  the  same  period,  the  total  consumption  being 
about  66,000,000  pounds.  In  the  hosiery  trade,  too, 
the  tendency  to  cut  down  the  quality  and  the  price  by 
using  more  cotton  and  less  wool  is  just  as  marked. 


A    CONDITION,    NOT   A    THEORY  23 

In  1890  there  was  used  in  this  industry  less  than  four 
pounds  of  cotton  to  one  pound  of  wool,  while  the  pro- 
portion in  1900  was  more  than  twelve  pounds  of  cot- 
ton to  one  of  wool.  Although  the  population  of  the 
country  increased  between  1890  and  1900  nearly 
twenty-two  per  cent.,  yet  the  actual  wool  used  in  this 
industry  declined  about  fifteen  per  cent.  Before  the 
Industrial  Commission  in  February  and  May,  1901, 
witness  after  witness  appeared  in  behalf  of  the  man- 
ufacturers of  woolen  goods  and  asked  that  the  duty 
on  raw  wool  be  removed,  and  urged  upon  the  Commis- 
sion that  if  this  duty  was  removed  and  a  reasonable 
duty  placed  upon  the  imports  of  woolen  goods,  in  that 
case  the  woolen  manufacturers  would  become  large 
'exporters  of  woolen  goods.  Mr.  Arthur  Shadwell, 
in  his  work  of  the  present  year  on  "Industrial  Effi- 
ciency" and  the  comparative  cost  of  living  in  the 
United  States,  Great  Britain  and  Germany,  the  most 
thorough  investigation  upon  the  subject  ever  published, 
says :  "A  suit  of  clothes  which  can  be  bought  for  £2 
or  £3  in  England,  cost  £4.  to  £6  in  America,  and  sim- 
ilarly with  some  other  articles.  An  English  work- 
man told  me  of  his  experience  with  regard  to  hats. 
He  brought  with  him  to  the  States  a  felt  hat  which  he 
had  bought  for  7  shillings  and  six  pence.  When  it 
got  rather  shabby  he  wanted  to  buy  a  new  one  and 
asked  for  a  hat  of  the  same  quality.  The  price  was 
28  shillings." 


24  THE    TARIFF    AND   THE   TRUSTS 

We  produce  about  11,000,000  bales  of  cotton  annu- 
ally, which  is  more  than  the  product  of  the  rest  of  the 
world.  Alongside  of  our  cotton  fields  are  scattered 
many  of  the  factories  where  the  cotton  is  woven  into 
cloth,  and  the  price  of  labor  in  those  factories  is  less 
per  day  to  each  operative  than  it  is  in  England.  Yet 
our  annual  exports  of  manufactured  cotton,  consist- 
ing largely  of  coarse  cloth  from  these  Southern  fac- 
tories, amounts  to  only  about  $50,000,000,  while  the 
exports  of  manufactured  cotton  goods  from  Great 
Britain,  which  carries  its  raw  materials  from  our  cot- 
ton fields  across  the  Atlantic  to  its  factories,  is  $300,- 
000,000.  We  have  protected  the  cotton  industries 
since  1816,  when  a  duty  of  25  per  cent,  was  imposed, 
yet  after  eighty  years  of  fostering  this  industry  it  is 
protected  in  1905  by  an  average  ad  valorem  rate  of 
duty  upon  all  dutiable  imports  of  49.40  per  cent. 
Professor  Taussig,  in  his  "History  of  the  Tarifif,"  says : 
"Probably  as  early  as  1824,  and  almost  certainly  by 
1832,  the  industry  had  reached  a  firm  position,  in 
w^hich  it  was  able  to  meet  foreign  competition  on 
equal  terms.  Mr.  Nathan  Appleton,  who  was  a  large 
owner  of  cotton  factory  stocks,  and  who  was  also,  in 
his  time,  one  of  the  ablest  and  most  prominent  advo- 
cates of  protective  duties,  said,  in  1833.  that  at  that 
date  coarse  cottons  could  not  have  been  imported 
from  England  if  there  had  been  no  duty  at  all,  and 
that  even  on  many  grades  of  finer  goods  competition 


A    CONDITION,    NOT    A    THEORY  25 

was  little  to  be  feared."  Now,  more  than  sixty  years 
after  this  industry  had  become  firmly  established  and 
able  to  walk  alone,  it  procures  from  our  Congress  an 
average  duty  of  49.41  per  cent,  upon  all  dutiable  im- 
ports of  cotton.  We  have  simply  impaired  the 
strength  of  the  cotton  industry  by  coddling  it.  Will 
this  weakly  infant  ever  grow  to  independence? 

Sewing  silk  has  been  made  in  one  way  and  another 
for  over  a  century  in  this  country.  It  was  carried  on 
in  many  of  the  Eastern  states  immediately  after  the 
Revolution  as  a  household  industry.  By  1829  ma- 
chinery began  to  be  invented  and  improved  for  its  man- 
ufacture. Between  1852  and  i860  the  industry  de- 
veloped rapidly,  and  the  census  of  i860  reported  the 
value  of  sewing  silk  to  be  no  less  than  $3,600,000. 
Up  till  i860  Congress  had  not  imposed  protective 
duties  upon  the  importation  of  foreign  silk.  Under 
the  tariff  of  1864  an  average  ad  valorem  duty  of  60 
per  cent,  on  imports  of  silk  was  imposed,  and  it  con- 
tinued till  1883.  From  1883  to  1897  the  duty  was 
50  per  cent.,  and  the  Dingley  Tariff  increased  that 
duty  considerably,  imposing  such  high  duties  on  the 
cheaper  silks  as  to  be  practically  prohibitory. 

The  duties  upon  imported  woolen,  cotton  and  silk 
goods  are  what  are  known  as  compound  duties,  impos- 
ing specific  duties  upon  the  yard  and  the  pound  and 
ad  valorem  duties  upon  the  value,  and  resulting  in 
much  higher  duties  upon  the  lower  priced  commodi- 


26  THE    TARIFF    AND    THE    TRUSTS 

ties  purchased  by  people  of  moderate  means  than  up- 
on the  higher-priced  goods  of  the  same  class  pur- 
chased by  the  wealthy.  Thus,  upon  a  class  of  Eng- 
lish dress  goods  made  of  a  mixture  of  wool  and  cot- 
ton and  costing  17  cents  per  yard  in  London  a  duty 
of  50  per  cent,  ad  valorem  and  44  cents  a  pound  is 
imposed,  equivalent  to  a  duty  of  303^  cents  per  yard, 
or  166  per  cent.  These  goods  retail  in  London  for  25 
to  28  cents  a  yard  and  in  the  United  States  for  75 
cents  per  yard.  In  the  same  class  of  goods  of  a 
higher  value,  with  the  same  apparent  duty,  costing  64 
cents  a  yard  in  London,  a  duty  equivalent  to  78  cents  a 
yard,  or  121  per  cent.,  is  imposed.  So  you  will  see 
that  poor  people  buying  the  cheaper  grade  pay  45  per 
cent,  more  duty  than  the  wealthier  class  purchasing 
the  higher-priced  goods.  With  regard  to  cotton 
goods,  a  yard  of  cheap  quality  of  dotted  swiss  which 
costs  16  cents  a  yard  in  Paris  and  pays  a  duty  of  35 
per  cent,  ad  valorem  and  a  specific  duty  of  3^  cents 
per  yard,  pays  a  duty  equivalent  to  934  cents  a  yard, 
or  58  per  cent,  of  its  cost  price.  Now,  a  finer  quality 
of  dotted  Swiss  purchased  by  the  wealthier  people,  and 
costing  48  cents  in  Paris,  is  in  the  same  class,  and  pays 
the  same  apparent  duty  of  35  per  cent,  ad  valorem 
and  334  cents  per  yard,  equivalent  to  a  duty  of  20 
cents  per  yard,  or  only  43  per  cent,  instead  of  58  per 
cent,  of  the  cost  price.  A  yard  of  cheap  silk  and  cot- 
ton mill,  costing  8  cents  a  yard  in  Paris  and  paying  a 


A    CONDITION,    NOT   A   THEORY  27 

duty  of  $1.30  per  pound,  pays  a  duty  of  80  per  cent,  of 
its  cost  price,  while  a  finer  grade  of  mull,  costing  23 
cents  a  yard  and  paying  the  same  duty,  $1.30  per 
pound,  pays  a  duty  of  50  per  cent,  instead  of  80  per 
cent,  of  the  cost  price. 

Not  only  does  the  tariff  impose  a  higher  tax  upon 
the  poor  purchasing  the  cheaper  grades  than  upon  the 
wealthier  people  purchasing  the  better  grades,  but  up- 
on the  cheaper  grades  of  goods  not  coming  under  the 
same  apparent  schedule  specific  duties  are  imposed 
upon  the  cheaper  grades  and  ad  valorem  duties  upon 
the  costlier  grades.  Thus,  in  linings,  cheap  buckram 
pays  a  duty  of  i^  cents  per  square  yard,  or  55  per 
cent,  of  the  cost  price,  while  the  higher-priced  organdie 
pays  only  a  duty  of  35  per  cent,  ad  valorem.  In  vel- 
vets some  of  the  expensive  silk  velvets  pay  a  duty  of 
only  50  per  cent,  whereas  the  cotton  velvet  used  by 
the  poor  pays  a  duty  of  $1.50  per  pound  and  15  per 
cent,  ad  valorem,  equivalent  to  70  per  cent.  Running 
through  the  entire  schedules  of  the  tariff  of  1897,  in- 
volving thousands  of  articles,  we  find  the  use  of  spe- 
cific duties  per  yard  and  pound  imposing  high  duties 
upon  the  cheaper  grades  of  imported  goods  and  duties 
from  twenty  to  fifty  per  cent,  lower  upon  the  costly 
goods  bought  by  wealthier  purchasers.  In  a  subse- 
quent chapter  on  Our  Tariff  History,  under  the  title 
McKinley  Bill,  we  have  gathered  a  large  number  of 
illustrations    of    this    injustice.     The    result    of    this 


28  THE    TARIFF    AND    THE    TRUSTS 

method  of  imposing  duties  is  that  nearly  all  the  cheap- 
er grades  of  goods  are  actually  prohibited  from  im- 
port, and  the  trust  is  thus  afforded  an  opportunity  to 
impose  its  prices  upon  the  goods  of  the  poor  without 
the  slightest  competition  from  foreign  imports. 

Pig  iron  and  hammered  iron  were  produced  in  the 
colonial  days  of  the  country  so  cheaply  and  with  such 
abundance  that  the  English  iron  masters  were  jealous 
of  our  superiority  in  its  manufacture,  Hamilton,  in 
his  famous  "Report  on  Alanufacturers,"  said:  "The 
continuance  of  bounties  on  manufactures  long  estab- 
lished must  always  be  of  questionable  policy,  because 
a  presumption  would  arise  in  every  such  case  that 
there  were  natural  and  inherent  impediments  to  suc- 
cess." And,  speaking  of  manufacturing  industries 
which  were  then  established  in  the  United  States,  he 
says :  "It  is  certain  that  several  important  branches 
have  grown  up  and  flourished  with  a  rapidit}"  which 
surprises,"  and  among  these  he  especially  mentions 
pig  and  bar  iron.  Now  observe  that  the  protection- 
ists of  the  country  hold  up  Alexander  Hamilton  as 
the  man  to  whom  they  owe  the  protective  policy  of  the 
country  and  Hamilton,  the  practical  author  of  our 
protective  system,  creating  a  fiscal  policy  for  his  coun- 
try, knowing  the  exact  condition  of  things,  regarded 
the  production  of  pig  iron  and  bar  iron  as  so  well 
established  in  1790  as  not  to  be  in  need  of  protection. 
Of  this  Professor  Taussig  says :  "No  protection  was 


A    CONDITION^    NOT    A   THEORY  29 

attempted  to  be  given  to  the  production  of  pig  iron  or 
bar  iron,  for  it  was  thought  that  the  domestic  producers 
would  be  able  to  compete  successfully  with  their 
foreign  competitors  in  this  branch  of  the  iron  trade." 
One  hundred  and  sixteen  years  later,  possessing  the 
greatest  deposits  of  iron  ore  known  in  the  world,  with 
the  most  intelligent  labor,  with  our  foundries,  plate 
mills,  rail  mills,  tin-plate  mills,  and  wire-nail  mills, 
equipped  more  completely  than  any  in  the  world ;  ex- 
porting as  we  do,  according  to  the  recent  statistical  re- 
port of  James  M.  Swank,  general  manager  of  the 
American  Iron  and  Steel  Association,  for  the  year 
ending  July  i,  1906,  iron  ore,  iron  and  steel  in  the 
amount  of  over  $143,000,000,  home  value,  producing 
about  half  the  product  of  pig  iron  in  the  world,  we 
impose  an  average  ad  valorem  rate  of  duty  of  49.46 
per  cent,  upon  the  entire  schedule  of  iron  and  steel, 
and  upon  pig  iron  alone  a  duty  of  $4  per  ton.  Before 
the  Tariff  Commission  appointed  by  the  Conservative 
Government  of  England  at  the  instance  of  Air. 
Chamberlain  in  1903,  came  as  a  witness  Mr.  J.  S. 
Jeans,  the  Secretary  of  the  British  Iron  Trade  Asso- 
ciation, probably  the  best  qualified  to  speak  upon  the 
comparative  cost  of  producing  steel  in  Great  Britain 
and  in  the  United  States  of  any  man  in  that  country. 
Mr.  Jeans  testified :  "Our  own  home  market  does  not 
absorb  more  than  3,000,000  to  3,500,000  tons  of  steel 
a  year,  whereas  the  American  market  consumes  nearly 


30  THE   TARIFF   AND   THE    TRUSTS 

15,000,000  tons,  and  the  German  market  consumes 
nearly  5,000,000  tons.  The  much  greater  output  of  a 
given  steel  plant  in  the  United  States  than  in  any  other 
country  is  partly  due  to  the  more  suitable  composition 
of  the  iron  used,  partly  to  more  speedy  methods  of 
charging  furnaces,  and  partly  to  the  use  of  molten 
iron.  Even  zvhcn  the  plant  employed  is  fully  up  to 
date,  as  it  is  in  many  English  zcorks,  the  quantity  of 
steel  produced  is  less  than  one-half,  and  sometimes  less 
than  one-third,  the  quantity  produced  in  the  best 
American  practice."  This  agrees  with  the  statement 
of  M.  Pierre  Leroy-Beaulieu  above,  and  shows  be- 
yond any  question  that  we  are  capable  of  manufactur- 
ing steel  billets  and  rails  at  considerably  less  cost  than 
can  the  iron  masters  of  Great  Britain,  and  that  there 
is  no  reason  whatever  for  the  existence  of  our  pro- 
tective duties  on  steel  in  any  form.  In  fact,  the  Tariff 
Commission  in  England  reported  that  the  Americans 
were  able  to  produce  steel  at  much  less  cost  than  the 
English  producers,  and  recommended  a  tariff  for  that 
reason  upon  all  our  products  of  steel.  In  1877  the 
average  price  of  steel  rails  in  England  was  only  a  little 
over  $28  per  ton,  while  the  duty  on  imports  of  steel 
rails  into  this  country  was  $28  per  ton.  Even  as  early 
as  1877  steel  rails  could  be  made  in  this  country  as 
cheaply  as  in  England,  but  that  duty  of  $28  per  ton 
continued  until  1883 !  and  our  domestic  producers  of 
steel  rails  sold  them  during  that  period  at  from  $61 


A    CONDITION,    NOT    A   THEORY  3I 

per  ton  to  $67  per  ton,  making  100  per  cent,  yearly  up- 
on the  money  invested.  Congress  knew  this  fact,  or 
at  least  ought  to  have  known  it,  but  in  the  Dingley 
Bill  it  imposed  a  duty  of  $7.84  per  ton  upon  steel  rails, 
when  for  twenty  years  we  had  been  manufacturing 
them  cheaper  than  any  other  country  in  the  world. 

The  United  States  Steel  Corporation  is  the  greatest 
industrial  giant  on  earth.  Its  total  capitalization  on 
December  31,  1903,  was  $1,442,714,114.  This  capital- 
ization was  based  upon  actual  assets  at  the  time  of  its 
formation  of  not  over  $500,000,000.  The  only  method 
of  sustaining  such  a  capitalization  at  a  later  stage  in 
the  Hodge  suit  was  by  estimating  the  iron  ore  prop- 
erties, the  coal,  coke  and  gas  fields,  and  the  limestone 
properties  at  $824,000,000,  when,  as  a  matter  of  fact, 
they  were  regarded  at  the  time  of  their  purchase  or 
lease  as  less  than  half  that  value.  The  deposits  of 
iron  ore  computed  in  this  estimate  at  $700,000,000  are 
actually  assessed  by  the  Minnesota  authorities  for  tax- 
ation at  only  about  $40,000,000.  For  the  two  years 
ending  December  31,  1903,  its  gross  sales  and  earn- 
ings amounted  to  $1,100,000,000.  These,  however, 
included  sales  from  one  subsidiary  company  to  an- 
other, which  were  estimated  as  amounting  fo  $300,- 
000,000,  leaving  $800,000,000  as  the  gross  receipts  for 
the  two  years.  Its  net  profit  for  those  two  years  was 
$242,479,916,  leaving  the  total  cost  for  the  goods 
produced    $558,000,000.     This     $242,479,916     profits 


32 


THE    TARIFF    AND    THE    TRUSTS 


were  the  profits  on  15,832,922  tons  of  finished  steel 
goods,  an  average  of  $15.31  per  ton,  or  over  40  per 
cent,  of  the  total  cost  of  the  product.  Mr.  Byron  W, 
Holt,  the  editor  of  Moody's  Magaciuc,  in  1904  pre- 
pared, in  a  publication  of  the  American  Free  Trade 
League,  the  following  schedule  giving  the  amount  of 
each  of  the  sixteen  products  of  the  steel  trust  during 
the  two  years  ending  December  31,  1903,  the  amount 
of  duty  upon  each  product,  and  the  whole  amount  of 
the  tariff  profit  upon  each  product. 

Statistics  of  Production,  from  the  Second  Annual 
Report  of  the  United  States  Steel  Corporation  for  the 
two  years  ending  December  31,  1903: 

Production  1902,           Duty   Rate  Tariff 

1903.     Tons.                  per  Ton  Profit 

Steel     rails 3,855,101  $7.84  $29,635,000 

Blooms,   billets,    slabs, 

sheet   and    tin    plate 

bars     1,275.929       6.72  to  $105.48  9,920,000 

Plates     1,169,254  1 1.20  up  12,880,000 

Merchant    steel,    skelp, 

shapes,  hoops,  bands, 

and    cotton    ties 2,252,155  11.20  up  22,520,000 

Tubing   and   pipe 1,539,883          35%  to  44.80  11,800,000 

Rods     211,029  8.96  up  1,800,000 

Barb     wire     700,000  28.00  9,600,000 

Wire    nails     800,000  1 1.20  up  8,250,000 

Other  wire  and  products.  749,414  33.60  up  8,400,000 
Sheets — Black    and 

Galvanized     738,791  21.16  up  8,760,000 

Tin     plate 900,000  33.60  22,000,000 

Finished  structural  work.  950,721  11.20  10,000,000 
Angle     and    splice    bars 

and     joints 278,663  8.96  up  2,100,000 

Spikes,    bolts,    nuts    and 

rivets      96,243      13.44   to    44.80  1,200,000 

Axles      256,503  22.40  up  2,880,000 

Sundry     iron     and     steel 

products     59,236  11.20  600,000 

15,832,922  $162,345,000 


A    CONDITION,    NOT    A    THEORY  33 

Mr.  John  R.  Dunlap,  writing  to  the  Evening  Post 
of  New  York  under  the  date  of  September  8,  1904, 
says  of  sales  by  the  United  States  Steel  trust  in  Eng- 
land and  the  United  States:  "In  the  spring  of  1903  I 
had  occasion  to  get  exact  market  quotations  for  vari- 
ous iron  and  steel  products  in  free  trade  England 
and  'protection'  America.  The  quotations  were  sup- 
plied by  one  of  the  oldest  and  most  reputable  New 
York  firms  engaged  in  iron  and  steel,  and  they  were 
as  follows,  the  quotation  in  each  case  being  for  a  long 
ton  of  2,240  pounds  f.o.b.  at  Middlesboro  and 
Swansea,  England,  and  f.o.b.  Pittsburg,  Pa.,  the  prices 
being  those  current  during  the  first  half  of  May,  1903 : 

England.  United     States.  Dingley 

Duty 

Merchant    bar    iron $30.00  $48.10  $i3-44 

Bessemer    billets     20.00  30.00  6.72 

Bessemer    pig   iron    14-36  19.35  4-oo 

No.   3    foundry   iron    11.40  19-75  4-oo 

Gray    forge    iron    1 1.25  19.00  4.00 

Tank   plates    30.91  38.08  13-44 

Black    plates     50.40  72.80  29.12" 

Mr.  Herman  B.  Butler,  the  vice-president  and  sec- 
retary of  the  firm  of  J.  T.  Ryerson  &  Son  of  Chicago, 
iron  merchants,  dealing  largely  in  iron  and  steel  in  the 
form  of  bars,  sheet  plates,  tubes,  etc.,  appeared  before 
the  Industrial  Commission,  and  the  following  ques- 
tions were  asked  him  and  the  answers  given : 

Q.     What,  then,  is  the  use  of  the  tariff? 

A.  You  mean  in  reference  to  this  at  the  present 
time? 

3 


34  THE    TARIFF    AND   THE    TRUSTS 

Q.  Yes,  any  time.  When  we  have  reached  a  point 
where  we  can  produce  cheaper  than  they  can  abroad 
what  do  we  want  a  tariff  for? 

A.  I  should  say  that  when  the  price  reaches  that 
point  the  tariff  ceases  to  be  of  any  service  to  us. 

Q.  This  very  statement  you  have  made  to  that 
effect,  that  American  goods  are  often  sold  abroad 
cheaper  than  they  are  sold  in  the  United  States,  has 
been  given  as  an  argument  in  favor  of  a  reduction  in 
the  tariff.  Do  you  think  that  it  is  an  argument  in 
favor  of  the  removal  of  the  tariff? 

A.  Well,  if  I  were  a  manufacturer,  I  should  say 
that  that  was  not  a  sufficient  argument ;  but,  as  a  tax- 
payer, I  should  say  that  it  was. 

The  duty  on  tin  plate  was  2  cents  a  pound  under 
the  McKinley  Bill,  i  cent  a  pound  under  the  Wilson 
Bill  and  is  i^^  cents  a  pound  under  the  Dingley  Bill. 
There  is  no  duty  upon  pig  tin,  there  is  no  pig  tin  in 
the  country.  It  takes  two  and  one-fourth  pounds  of 
tin  to  coat  one  hundred  pounds  of  tin  plate.  The  tin 
plates  are  known  as  the  black  plates,  and  are  produced 
by  the  United  States  Steel  Company,  which,  since  its 
incorporation,  has  owned  the  tin-plate  industry. 
Therefore  the  raw  materials  with  the  exception  of  pig 
tin,  are  produced  by  the  makers  of  tin  plate  and  pro- 
cured at  their  lowest  cost.  Congress  placed  this  high 
duty  originally  upon  tin  plate  upon  the  statement  of 
those  who  sought  the  duty  that  they  could  establish 


A    CONDITION,    NOT    A    THEORY  35 

the  industry  and  sell  tin  plate  to  our  consumers  at  a 
less  price  than  it  could  be  procured  from  the  English 
manufacturers  in  Wales.  To  obtain  the  establish- 
ment of  this  industry,  according  to  a  statement  of 
Mr.  Byron  W.  Holt,  made  in  the  fall  of  1899,  from 
the  time  of  the  enactment  of  the  McKinley  Bill  until 
that  date  the  tariff  on  tin  plate  had  laid  a  burden  of 
beween  $80,000,000  and  $90,000,000  on  our  consum- 
ers. At  the  time  Mr.  Holt  wrote,  and  for  some  time 
prior  thereto,  the  tin  plate  combination  had  an  agree- 
ment with  the  makers  of  the  machinery  used  in  mak- 
ing tin  plate  not  to  furnish  the  machinery  to  independ- 
ent makers.  Since  that  time  the  duty  of  13^  per  cent, 
has  continued,  and  in  June  of  the  present  year  tin 
plate  was  being  sold  to  domestic  consumers  at  65 
cents  a  box  more  than  the  same  box  of  tin  plate  of  the 
weight  of  one  hundred  pounds  could  be  delivered  from 
the  mines  in  Wales.  Up  till  the  present  time  the 
American  consumers  have  probably  paid  at  least  $125,- 
000,000  over  and  above  what  their  tin  plate  would 
have  cost  them  purchased  abroad,  to  establish  this  in- 
dustry ;  and  now,  although  the  duty  was  imposed  up- 
on the  statement  of  the  promoters  of  tin  plate  that 
they  could  establish  the  industry  and  sell  tin  plate  at 
a  lower  price  to  our  consumers  than  was  charged  by 
the  Welsh  manufacturers,  we  have  positive  proof  that 
they  have  not  performed  their  promises.  In  the  fiscal 
year  ending  June  30,   1890,  before  the  enactment  of 


36  THE    TARIFF    AND   THE    TRUSTS 

the  McKinley  Act  of  that  year,  we  imported  674,664,- 
458  pounds  of  tin  plate.  Its  cost  in  bond  was  $20,- 
746,427.73,  or  $3.07^  per  hundred  pounds.  On 
June  II  of  the  present  year  one  hundred  pounds  of 
tin  plate  cost  $3.75  at  the  mill  in  Pennsylvania,  or 
$3.93  at  New  York,  nearly  a  dollar  a  box  more  than 
it  cost  in  1890.  Is  the  steel  trust  an  infant  industry 
which  needs  protection?  Is  it  necessary  at  this  stage 
of  the  development  of  this  industry  to  favor  it  by  such 
high  duties?  Is  it  not  even  evidence  of  corruption 
to  find  such  gigantic  strength  assumed  by  government 
as  needing  protection,  while  the  consumer's  inability 
to  protect  himself  against  the  exactions  of  such  a 
trust  passes  unheeded?  Are  we  never  to  withhold 
the  milk  ration  from  the  Pennsylvania  nursery?  Al- 
ready the  baby  has  a  suction  power  of  many  million 
horse-power. 

The  average  ad  valorem  rate  of  duty  on  sugar, 
as  appears  by  the  Department  of  Commerce  and  Labor 
Reports  for  foreign  commerce  in  1904,  is  75.35  per 
cent.  A  considerable  proportion  of  this  duty  is  upon 
raw  sugar.  The  protection  on  refined  sugar  which 
goes  to  the  refiner  is  at  least  123^  cents  per  hundred 
pounds,  and  is  claimed  by  Henry  T.  Oxnard  of  the 
beet  sugar  industry  to  be  fully  50  per  cent.  In  1877 
the  first  sugar  trust  was  formed,  and  since  that  time, 
although  the  machinery  for  refining  sugar  has  been 
improved,    and    the    methods    of    business    also    im- 


A    CONDITION,    NOT   A   THEORY  37 

proved,  yet  the  price  of  refined  sugar  has  been  stead- 
ily maintained,  while  the  price  of  raw  sugar  has  ma- 
terially and  steadily  decreased.  Since  the  passage  of 
the  Dingley  Duty,  according  to  competent  experts  we 
have  been  paying  to  the  sugar  trust,  in  the  increased 
price  of  sugar  by  reason  of  the  duty  on  refined  sugar, 
at  least  $20,000,000  yearly  over  and  above  the  sum 
paid  by  it  to  the  government  as  a  tariff  tax.  The 
same  authority  computes  that  out  of  every  dollar's 
worth  of  sugar  that  we  buy,  40  cents  is  for  tariff,  a 
large  portion  of  which   remains  with  the  trust. 

On  December  20,  1900,  there  appeared  before  the 
Industrial  Commission  Mr.  George  H.  Mayer,  who 
had  charge  of  the  purchase  of  plate  glass  for  the 
house  of  John  Lucas  &  Co.,  of  Philadelphia — a  house 
established  in  1848  and  well  known  all  over  the  United 
States.  Mr.  Mayer  testified  that  the  Pittsburg  Plate 
Glass  Co.,  which  controls  eighty  per  cent,  of  the  sale 
of  all  the  glass  in  the  United  States,  within  the  three 
years  since  the  passage  of  the  Dingley  Bill  in  1897 
had  increased  the  price  which  John  Lucas  &  Co.  was 
obliged  to  pay  them  for  plate  glass  in  the  amount  of 
150  per  cent.  The  duty  on  plate  glass  is  about  80 
per  cent.,  and,  as  will  appear  in  a  subsequent  chapter, 
the  jobbers  were  forbidden  by  the  trust  to  purchase  it 
abroad.  Mr.  Mayer  was  asked  by  the  Industrial 
Commission : 

"Q.     Will  you  take  particular  classes  of  glass  and 


^o*cSO«jO 


38  THE    TARIFF    AND    THE    TRUSTS 

show  what  the  prices  were  two  years  ago,  three 
months,  six  months  and  so  on  for  the  last  two  years' 
period  ? 

"A.  Yes ;  I  can  take  a  stated  size  and  show  you 
what  it  was  worth  three  years  ago  and  what  it  is  to- 
day. I  can  give  you  that  in  detail  now,  so  far  as  the 
domestic  article  is  concerned,  but  I  cannot  with  refer- 
ence to  the  foreign.  I  will  give  you  three  examples. 
Take  size  12  by  60 — that  is,  12  inches  by  60  inches — 
the  price  two  or  three  years  ago  was  75  cents  a  light ; 
to-day  it  is  selling  for  $1.88.  Size  24  by  60,  the  price 
two  or  three  years  ago  was  $2.40;  to-day  it  is  $6. 
Size  24  by  84,  two  or  three  years  ago  was  selling  at 
$4.44;  to-day  it  is  selling  at  $11.38.  The  basis  that  I 
take  on  the  price  two  or  three  years  ago  is  90  per  cent, 
discount ;  the  basis  to-day  is  75  per  cent,  discount. 

"Q.     Those  are  sizes  in  common  use  ? 

"A.  Those  are  sizes  largely  in  demand ;  in  fact, 
those  three  sizes  cover  the  greater  part  of  the  de- 
mand." 

The  duty  on  window  glass  generally,  both  under 
the  McKinley  Bill  and  under  the  Dingley  Bill,  varies 
from  i^/g  cents  to  3  cents  per  pound,  and  averages 
about  2  cents  per  pound.  This  is  generally  equivalent 
to  between  80  and  100  per  cent,  and  often  exceeds 
100  per  cent.  From  i860  to  i8go  prices  in  this  coun- 
try declined  an  average  of  eight  per  cent.,  although 
foreign  prices  declined  fifty-four  per  cent,  from  1867 


A    CONDITION,    NOT    A    THEORY  39 

to  1890.  The  duties  on  pottery  are  about  the  same  as 
upon  window  glass,  although  the  first  pottery  manu- 
factory was  established  in  South  Carolina  in  1765,  and 
the  industry  in  those  days  was  of  sufficient  importance 
to  cause  alarm  among  the  makers  of  pottery  in  Eng- 
land. 

The  duty  on  beef  and  pork  is  2  cents  a  pound.  The 
duty  on  bacon  and  hams  from  1880  to  1890  was 
2  cents  a  pound,  by  the  McKinley  and  Dingley  Bills 
it  was  made  5  cents  a  pound.  In  i860  butchers  paid 
about  the  same  for  cattle  as  to-day,  and  they  slaugh- 
tered them  without  the  use  of  machinery,  availing 
themselves  in  no  respect  of  the  numerous  by-products 
which  the  meat  packers  of  Chicago  to-day  so  carefully 
save,  and  yet  the  prices  of  beef  and  pork,  according 
to  the  tables  of  the  R.  G.  Dun  Mercantile  Agency,  re- 
ferred to  above,  show  but  little  difference  between  the 
cost  of  meat  to  the  consumers  in  i860  and  the  present 
time. 

The  National  Boot  and  Shoe  Manufacturers'  As- 
sociation in  Boston  recently  announced  that  the  price 
of  shoes  would  have  to  be  changed  in  the  near  future, 
unless  something  was  done  about  the  tariff  on  hides. 
What  a  few  years  ago  was  the  $3.00  shoe  is  now  the 
$3.50  shoe.  The  shoe  industry  is  perfectly  willing 
to  relinquish  25  per  cent.,  the  import  duty  on  boots 
and  shoes,  if  it  could  be  relieved  of  the  15  per  cent, 
duty    on    hides.     Ex-Governor    Douglas,    of    Massa- 


40  THE    TARIFF   AND   THE    TRUSTS 

chusetts,  tells  us  that  this  duty  adds  about  7  cents  a 
pair  to  the  cost  of  producing  the  grade  of  shoes  which 
he  manufactures.  It  puts  $2,500,000  into  the  Treas- 
ury of  the  United  States,  and  $7,000,000  of  profit  into 
the  hands  of  the  beef  and  leather  trusts. 

Nearly  •every  implement  made  by  our  hardware 
manufacturers  is  highly  protected  from  foreign  com- 
petition. Notwithstanding  this  fact,  for  twenty-five 
years  these  manufacturers  of  hardware  have  been 
shipping  their  product  all  over  the  world  and  seUing 
it  in  competition  with  the  productions  of  other  coun- 
tries. A  hardware  merchant  of  fifty  years'  experi- 
ence in  the  trade,  writing  in  the  issue  of  the  Iron  Age 
of  January  4,  1906,  says:  "It  may  be  relied  upon  that 
the  American  hardware  trade  enjoys  no  ephemeral 
existence,  does  not  depend  upon  the  tariff  or  any  other 
kind  of  legislation,  but  is  solidly  based  upon  national 
advantages  and  the  national  character,  and  therefore 
can  never  be  seriously  affected  by  foreign  competition 
come  from  what  quarter  it  may."  If  the  success  of 
the  industry  does  not  depend  upon  the  tariff  at  all,  if, 
as  we  shall  hereafter  show,  our  hardware  merchants 
are  selling  their  goods  in  Canada  at  prices  considerably 
lower  than  in  the  United  States  and  requiring  the  job- 
bers there  to  exact  from  the  hardware  merchants  an 
agreement  not  to  sell  under  certain  prices  lest  it  dis- 
turb their  American  trade,  why  should  the  duties  on 
imports   of   hardware   be   continued?     Do  our   hard- 


A   CONDITION,    NOT    A   THEORY  4I 

ware  merchants  expect  that  their  American  customers 
will  continue  to  be  fleeced  and  will  enjoy  being  fleeced 
in  the  future?  The  imports  of  hardware  of  1855 
were  practically  the  same  as  in  1905.  It  is  perfectly 
evident  that  all  duties  upon  hardware  are  unnecessary 
for  the  prosperity  of  the  manufacturers  of  hardware, 
and  still  they  insist  on  keeping  these  duties  upon  the 
statute  book  and  using  the  duties  as  a  means  of  ex- 
torting money  from  the  American  people. 

We  need  lumber  to  build  and  repair  our  houses, 
which  the  vast  stores  of  Canada  are  ready  to  furnish 
us,  but  the  Dingley  Tariff  intervenes  and  says :  "First 
pay  the  extra  $2  a  thousand" ;  and  we  hack  down  our 
own  forests,  dry  up  the  sources  of  our  rivers,  destroy 
the  supply  of  water  for  irrigation,  and  thus  impair  the 
power  on  which  we  must  depend  eventually  to  furnish 
us  with  electricity.  We  need  steel  and  iron  beams  and 
girders  for  our  buildings,  but  load  them  with  heavy 
duties.  We  require  cement  in  great  quantities  in  the 
erection  of  buildings,  and  can  make  it  probably  as 
cheap  as  any  other  people;  but  before  we  can  get  a 
barrel  of  it  the  tariff  tribute  must  be  paid  at  the  rate 
of  8  cents  per  hundred  pounds,  including  weight  of 
barrel  and  package.  The  Official  Bureau  of  Labor  at 
Washington,  in  its  recent  report,  estimates  that  if  a 
person  built  a  house  in  the  year  1905,  he  would  have 
to  pay  41.4  per  cent,  more  for  his  materials  than  in 
the  year  1897.     That  is,  a  house  in  ^hich  the  material 


42  THE   TARIFF   AND   THE    TRUSTS 

cost  $3,000  in  1897  would  cost  $4,242  for  the  same 
material  in  1905.  When  you  buy  a  jack-knife  of 
foreign  make  for  fifty  cents,  you  pay  about  150  per 
cent,  duty  thereon.  When  your  wife  buys  a  pair  of 
the  cheapest  foreign  scissors,  she  pays  a  duty  of  at 
least  100  to  150  per  cent.,  and  on  the  commonest  table 
knives  and  forks  of  100  to  200  per  cent.  The  duty 
on  a  pound  of  Sumatra  tobacco,  the  foreign  cost  of 
which  is  75  cents,  is  only  $1.85,  or  384  per  cent.  Mr, 
John  Sharp  Williams  recently  presented  in  Congress 
a  schedule  which  he  had  caused  to  be  compiled  from 
actual  imports  in  the  port  of  New  York  showing  57 
separate  articles  of  import  upon  which  the  duties  ran 
all  the  way  from  100  up  to  251  per  cent. 

These  duties  are  mysteriously  incorporated  in  the 
price  of  about  everything  which  the  mechanic,  the 
farmer,  the  house-builder  and  the  housewife  buy. 
They  do  not  add  a  dollar  to  their  worth,  but  are 
simply  a  private  tax  permitted  by  government  to  the 
safeguarding  and  increase  of  the  income  of  profit  of 
a  few  hundred  manufacturers  and  wool-growers  who 
have  succeeded  in  maintaining  for  their  own  advantage 
this  confusion  between  public  and  private  right.  We 
have  constituted  in  this  land  of  the  free  by  our  own 
suffrages  a  privileged  order,  which,  instead  of  being 
exempt  from  the  payment  of  taxes,  as  was  the  priv- 
ileged order  in  France  at  the  time  of  Louis  XIV  and 
Louis  XVI,  itself,  through  the  government,  imposes 


A    CONDITION,    NOT    A   THEORY  43 

private  taxes  on  all  of  its  fellow-countrymen.  This 
tax  decreed  by  government  is  devoted  only  in  a  small 
part  to  the  maintenance  of  the  expenses  of  govern- 
ment, but  is  imposed  at  the  behests  of  a  few  men,  and 
permits  them  to  continue  into  the  twentieth  century 
the  customs  of  France  in  the  eighteenth  century,  when 
the  lord  laid  dues  upon  the  serf  for  his  own  advantage. 
Suppose  that  the  government  should  pass  a  statute  re- 
quiring every  laboring  man  to  work  for  a  certain  wage 
per  day  or  requiring  every  producer  of  grain  or  wheat 
or  corn  or  oats  or  hardware  or  any  commodity  pro- 
duced in  this  country  to  sell  this  product  at  a  certain 
price  below  the  market  value,  our  people  would  de- 
clare this  a  usurpation  of  power,  and  the  courts  would 
declare  the  statute  void,  as  impairing  the  obligation 
of  contracts  and  the  right  to  contract.  Government 
does  not  do  this,  but  is  it  not  an  equal  usurpation  of 
power  to  impose  duties  which  result  in  certain  favored 
producers  selling  in  a  restricted  market  at  an  enhanced 
price  which  the  citizen  must  pay  or  starve?  The  con- 
dition has  become  so  bad  that  our  politicians  dare  not 
take  a  step  back  to  a  healthful  condition  lest  that  step 
cause  such  depression  as  to  destroy  their  political  aspi- 
rations. When  you  ask  them  to  give  up  a  single  one 
of  these  terrible  abuses,  they  fling  up  their  hands  and 
say,  "If  we  open  the  case  for  discussion,  the  whole 
theory  of  protection  will  fall  to  the  ground,  and  there- 
fore we  must  'stand  pat.'  "     This  simply  means  that 


44  THE   TARIFF    AND   THE   TRUSTS 

the  conditions  are  so  bad  that  they  fear  to  touch  this 
foul  ulcer  of  the  Commonwealth  lest  it  bring  upon  us 
a  panic. 

Indirect  taxation  by  means  of  a  tariff  is  always  an 
oppressive  tax,  because  it  is  not  imposed  upon  prop- 
erty, but  falls  upon  the  food  or  necessaries  of  life  of 
the  people ;  but  when  connected  with  such  a  tax  and 
as  a  direct  result  of  such  a  tax  powerful  industries  are 
allowed  to  extort  billions  of  dollars  from  the  people 
of  a  country  in  enhanced  prices,  it  is  simply  out- 
rageous. The  hearths  of  the  humble  people  of  this 
land  are  not  sacred  when  such  injustice  can  be  prac- 
ticed upon  them  without  exciting  public  indignation. 
Every  farmer  who  strings  a  fence  or  builds  a  barn, 
every  house-builder  or  contractor,  every  person  using 
iron  or  steel  or  glass  or  pottery,  must  pay  tribute  to 
the  beneficiaries  of  this  tariff.  Even  as  I  write  thou- 
sands of  farmers  are  trundling  along  in  their  farm 
wagons  back  from  town  and  city  to  the  farm  with  a 
reel  of  barb-wire,  a  keg  of  nails,  a  little  iron  or  steel  to 
be  used  upon  the  farm,  some  cutlery,  hardware,  glass- 
ware, tin  ware  or  clothing  for  themselves  or  family, 
and  each  and  every  one  of  them  has  paid  therefor  a 
price  enhanced  by  the  tariff  in  an  amount  of  from  30 
to  250  per  cent.  In  the  current  issue  of  the  Bulletin 
of  the  Department  of  Labor  at  Washington,  we  find 
a  contribution  from  S.  E.  Forman,  describing,  with 
great  minuteness,  the  life  and  expenditures  of  nineteen 


A    CONDITION,    NOT    A   THEORY  45 

selected  families  of  the  poorer  class  of  laboring  men. 
He  tells  us  that  they  are  representatives  of  many 
honest  industrial  citizens  who  help  to  make  the  world 
around  us  the  pleasant  place  it  is,  yet  these  families 
are  described  as  being-  upon  the  verge  of  starvation. 
His  description  brings  a  vision  of  thousands  of  fam- 
ilies— not  individuals,  but  families — of  fathers,  moth- 
ers and  children,  ragged,  pallid  and  ghastly,  passing 
on  during  all  these  last  fifty  years  of  tariff  extortion 
in  never-ending  procession  from  the  cradle  to  the 
grave,  each  paying  its  tribute  to  this  monstrous  in- 
justice; and  while  the  procession  passes  I  hear  the 
voice  of  one  of  our  great  industrial  barons,  protected 
on  his  bituminous  coal  product  by  a  duty  of  6y  cents 
a  ton,  and  I  hear  him  say  of  himself  and  the  others 
Tvho  are  conducting  the  industries  of  this  country  that 
they  are  ''Christian  gentlemen  to  whom  God  has  com- 
mitted the  property  interests  of  the  country."  The 
wealthy  beneficiaries  of  the  tariff  almost  invariably 
identify  themselves  with  Providence  itself,  and,  in 
atonement  for  their  wrongs  to  the. American  people, 
scatter  millions  indiscriminately  in  charity.  Thomas 
Carlyle,  speaking  to  the  English  people  in  the  hungry 
forties  before  the  Corn  Law  was  repealed,  said  that 
he  saw  around  him  "dingy,  dumb  millions,  grimed 
with  dust  and  sweat,  with  darkness,  rage  and  sorrow, 
saying  or  struggling  as  they  could  to  say :  'Behold  our 
lot  is  unfair,  our  life  is  not  whole,  but  sick ;  we  cannot 


46  THE    TARIFF    AND   THE   TRUSTS 

live  under  injustice;  up  ye,  and  get  us  justice.'  "  And 
this  is  the  message  which  the  facts  detailed  in  this 
chapter  bring  to  Congress.  The  American  people  do 
not  want  charity ;  they  want  justice  and  merely  the 
commonest  kind  of  common  justice.  "Up  ye,  and  get 
us  justice." 


CHAPTER  II 

THE  TRUSTS   RESULTING   FROM    THE   PROTECTIVE   TARIFF 
AND   LEADING  TO   SOCIALISM 

There  is  no  novelty  in  our  American  trust.  In  the 
good  old  days  kings  would  give  their  favorites 
monopolies  at  the  public  expense.  Salt  works,  mines, 
quarries,  and  forests  were  regarded  by  all  the  ancient 
monarchs  as  crown  properties.  They  were  farmed 
out  to  favorites  who  undertook  to  pay  therefor  a  cer- 
tain fixed  rate,  and  were  given  full  liberty  by  the 
monarch  to  make  as  much  profit  out  of  the  transaction 
as  they  could.  The  natural  result  was  a  greatly  in- 
creased price  of  the  necessaries  of  life.  The  guilds 
of  the  Middle  Ages  were  also  a  prototype  of  our 
modern  trust.  Before  the  nineteen  century  towns, 
districts  and  nations  in  Europe  were  everywhere  sur- 
rounded with  walls  of  legislative  restrictions  intended 
to  keep  out  the  monster,  trade.  Monopolies  existed 
in  the  time  of  Martin  Luther,  and  those  who  created 
and  profited  by  them  received  from  him  severe  censure. 
In  his  work  entitled  "Trade  and  Usury"  he  says :  "Un- 
less one  is  stupid,  one  must  see  that  these  organizations 
are  nothing  more  than  'monopolia.'  When  worldly 
law  prohibits  these  combinations,  so  injurious  to  the 

47 


48  THE    TARIFF   AND   THE    TRUSTS 

Vv'hole  world,  I  need  say  nothing  of  godly  and  Chris- 
tian Law.  These  industrial  combinations  do  every- 
thing they  please,  raise  and  lower  prices  according  to 
their  own  will,  and  to  the  injury  of  small  merchants. 
They  are  like  the  pike  who  attacks  small  fishes  in  the 
water,  acting  as  if  they  were  the  masters  of  God's 
creatures,  and  beyond  all  law,  belief,  and  love.  It  is 
not  to  be  wondered  at  that  small  merchants,  not  wish- 
ing to  lose,  comply  with  the  wishes  of  these  monopo- 
lies, for  to  receive  a  certain  pfennig  is  better  than  an 
uncertain  gulden."  The  Court  of  General  Quarter 
Sessions  of  the  Peace  was  the  first  Court  established  in 
the  colony  of  New  York.  This  Court  opened  August 
7,  1694,  with  Abraham  De  Peyster  as  presiding  Judge. 
The  first  indictment  found  in  this  Court  was  against 
John  Watson,  who  was  accused  of  forestalling  the 
market,  and  prosecutions  for  forestalling  the  market 
continued  in  New  York  for  many  years. 

Nor  are  the  reasons  given  in  our  day  for  creating 
trusts  new.  Elizabeth  granted  patents  or  privileges 
to  her  favorites  for  the  exclusive  sale  by  each  of  them 
of  the  commodity  mentioned  in  his  patent.  The 
patentees  exacted  oppressive  prices  for  their  com- 
modities, and  a  storm  of  indignation  arose  in  England. 
When  a  delegate  from  the  indignant  Commons  begged 
Elizabeth  to  recall  the  patents,  the  Queen  replied : 
"Since  I  was  Queen  yet  never  did  I  put  my  pen  to 
any  grant  but  that  upon  pretext  and  semblance  made 


THE   TRUSTS  49 

unto  me  that  it  was  both  good  and  beneficial  in  gen- 
eral though  a  private  profit  to  some  of  my  ancient 
servants  who  had  deserved  well."  Ever  since  the  time 
of  Queen  Elizabeth,  governments,  tempted  to  exercise 
arbitrary  power  in  granting  oppressive  tariffs  or  au- 
thorizing monopolies  and  trusts,  have  ever  maintained 
as  did  Elizabeth  that  they  were  "good  and  beneficial 
to  the  subjects,"  and  have  not  been  wanting  in  finding 
a  "pretext  and  semblance"  of  reason  for  their  action. 
The  English  Common  Law  since  the  reign  of 
Henry  V  has  regarded  combinations  to  control  prices 
of  commodities  as  opposed  to  public  policy.  In  the 
case  of  the  sugar  trust  several  corporations  engaged  in 
the  manufacture  of  sugar  selected  trustees  and  con- 
ferred upon  them  the  right  to  conduct  the  business  of 
manufacturing  sugar,  giving  them  the  power  to  sus- 
pend the  action  of  any  corporation,  to  dismantle  fac- 
tories, and  to  practically  destroy  the  corporate  life  of 
any  one  of  the  corporations.  The  Courts  of  New 
York  found  sufficient  evidence  to  establish  an  intent 
to  combine  the  different  corporations  and  control  their 
action  with  the  purpose  of  increasing  the  price  of 
sugar,  and  for  that  reason,  as  well  as  for  the  reason 
that  the  power  to  suspend  the  operation  of  corpora- 
tions was  placed  in  the  hands  of  the  trustees,  held  the 
combination  void.  The  men  connected  with  the 
sugar  trust,  however,  having  tasted  the  advantages  of 
monopoly  were  not  content  to  relapse  into  a  system  of 
4 


y 


50  THE    TARIFF    AND   THE    TRUSTS 

competition.  Without  statutory  authority  a  corporation 
could  not  invest  its  assets  in  the  purchase  of  the  stock 
of  other  Hke  corporations,  and  so  the  Legislature  of 
the  State  of  New  York  in  the  early  nineties  enacted 
a  law  permitting  this  to  be  done.  A  similar  provision 
of  law  was  enacted  later  in  New  Jersey,  in  Delaware, 
and  many  other  states ;  and  out  of  these  state  laws 
has  arisen  the  modern  corporation,  either  owning  or 
controlling  a  vast  number  of  corporations,  and  creat- 
ing a  monopoly  in  the  manufacture  or  sale  of  the  nec- 
essaries of  life.  It  is  a  niatter  worthy  of  notice,  and 
a  commentary  upon  legislation  in  these  days,  that  the 
very  Legislature  in  the  State  of  New  York  which 
gave  this  right  to  a  corporation  to  create  a  monopoly 
by  the  purchase  and  control  of  other  corporations  en- 
gaged in  like  business,  enacted  a  most  drastic  statute, 
punishing  any  arrangement  or  combination  whereby 
a  monopoly  in  the  manufacture,  production  or  sale  of 
any  article  or  commodity  in  common  use  was  created, 
and  declaring  such  a  monopoly  a  misdemeanor,  punish- 
able by  a  fine  not  to  exceed  $5,000,  or  imprisonment 
for  not  longer  than  one  year,  or  both  said  fine  and 
imprisonment.  By  the  statute  allowing  a  corporation 
to  purchase  stocks  of  other  corporations  the  Legisla- 
ture marked  out  the  way  for  the  creation  of  a  monopoly 
and  legalized  it,  and  then  turned  around  and  at  the 
same  session,  with  a  great  cry  against  monopolies, 
passed  a  statute  punishing  the  commission  of  that  for 


THE   TRUSTS  5^ 

which  it  had  already  provided.  Other  states  then  fol- 
lowed the  example  of  New  York  and  enacted  similar 
statutes  allowing-  the  creation  of  monopolies  and  then 
providing  for  their  punishment  by  rigorous  penal  laws. 
This  is  characteristic  of  American  legislation.  We 
legalize  conditions  out  of  which  an  evil  arises  and 
then  attempt  to  suppress  the  evil  by  penal  statutes! 
We  provide  for  high  duties  upon  foreign  imports  for] 
the  protection  of  home  industries,  and  when  a  monop- 
oly controlling  the  home  market  results  therefrom, 
then  pass  penal  laws  punishing  the  monopoly.  In  this 
way  our  politicians  prove  to  the  great  combinations 
who  furnish  campaign  disbursements  for  political 
parties  their  fidelity  to  monopolistic  interests,  while, 
by  the  penal  statute,  they  assure  the  people  that  they 
are  against  trusts.  By  such  legislative  action  greati 
discretion  and  power  are  vested  in  the  executive  of  the 
state  or  nation,  and  thus  government  is  centralized 
and  the  rights  of  the  whole  people,  as  well  as  the 
power  of  government,  are  placed  in  the  hands  of  a 
single  man. 

Our  protective  tarifif  is  the  genesis  of  the  trust. 
The  trust  comes  out  of  it  as  naturally  as  fruit  from 
blossom.  Obviously  the  control  of  a  market  by  a  com- 
bination or  trust  is  facilitated  where  the  field  of  com- 
petition is  artificially  limited  to  one  country  since  it 
is  easier  to  combine  the  producers  of  one  country  than^ 
those  of  all  countries,  and  to  that  extent  all  must  con- 


52  THE    TARIFF    AND   THE    TRUSTS 

cede  that  the  tariff  encourages  trusts.  The  natural 
result  of  high  duties  is  to  excite  increased  competition 
land  to  force  production  beyond  its  normal  limit,  then 
jthe  trust  comes  in  with  a  good  excuse  to  stay  competi- 
tion and  to  hold  the  price  of  the  domestic  protected 
)roduct  up  to  the  duty  line.  To  illustrate,  let  us  as- 
sume that  a  single  corporation  produces  the  product 
of  any  protected  necessary  of  life  in  this  country,  and 
it  would  be  clear  that  that  corporation  could  sell  its 
protected  goods  at  a  price  just  below  the  cost  of  the 
foreign  product  plus  the  duty.  In  experience,  how- 
ever, when  a  bill  like  the  Dingley  Bill  is  passed  creat- 
ing high  duties  on  competing  products,  it  inspires  the 
hope  in  thousands  of  people  that  they  may  avail  them- 
selves of  the  tariff  and  make  a  fortune.  They  rush 
into  competition  with  existing  manufacturers,  and  the 
result  is  overproduction  and  the  selling  price  of  the 
manufactured  article  is  liable  to  fall  below  the  cost  of 
the  foreign  article.  The  manufacturers  find  that  they 
are  losing  a  portion  of  the  benefit  of  the  increased 
duty,  and  seek  by  combination  to  stamp  out  competi- 
tion. Were  it  not  for  combination  much  of  the  unjust 
advantage  which  the  tariff  gives  to  the  American 
manufacturer  would  not  be  made  available.  A  simple 
illustration  will  make  this  point  clear.  A  manufacturer 
of  novelties,  who  has  one  factory  in  Connecticut  and 
another  in  England,  told  me  recently  that  he  used  a 
large  amount  of  cotton  elastic  webbing  in  the  course 


THE   TRUSTS  53 

of  his  manufacture,  and,  although  a  duty  of  40  per 
cent,  on  cotton  elastic  webbing  existed,  he  could  pur- 
chase his  supply  of  webbing  in  Connecticut  as  cheaply 
as  he  could  in  England,  the  reason  being  that  there 
was  no  trust  in  webbing  in  this  country.  Now,  ob-, 
serve  the  condition  we  have.  Our  great  financiers 
who  are  managing  the  monopolies  of  to-day  are  the 
very  men  who  go  to  Washington  or  send  their  agents 
there  and  seek,  through  representatives  in  Congress^ 
and  party  organizations  to  whom  they  have  givei 
campaign  disbursements,  an  increase  of  the  duties  up- 
on imports.  Having  procured  the  increase,  they 
themselves  have  become  the  cause  of  the  condition 
where  a  trust  becomes  useful.  The  law  they  have 
procured  naturally  and  necessarily  induces  thousands 
of  men  to  go  into  manufacturing  and  creates  undue 
competition ;  then  they  make  a  great  cry  against  "cut- 
throat competition,"  and  create  a  monopoly  to  destroy 
the  very  competition  which  results  from  the  tariff  act 
which  they  themselves  procured.  During  the  years 
1898,  1899,  ^"d  1900,  149  consolidated  industrial  cor- 
porations were  formed,  with  a  total  capitalization  of 
$3,784,000,000.  or  an  average  of  nearly  $36,000,000 
each.  Each  and  every  one  of  these  corporations  was 
as  clearly  and  as  positively  violative  of  the  spirit  of 
the  common  law  as  was  the  sugar  trust  or  the 
Standard  Oil  monopoly,  but  Congress  first  created  the 
conditions  out  of  which  they  came  into  existence,  and 


54  THE    TARIFF    AND   THE    TRUSTS 

then  passed  a  penal  anti-trust  law  to  punish  the  crea- 
tures of  its  own  making. 

Another  reason  given  in  favor  of  the  trust  is  the 
instability  of  trade  conditions,  and  its  existence  is 
defended  by  alleging  that  it  is  a  balance-wheel  which 
checks  the  excessive  fluctuations  in  the  market.  Since 
the  formation  of  the  great  combinations  fluctuations 
in  the  market  have  existed-  to  such  an  extent  as  not 
to  justify  this  claim  of  wholesome  restraint.     Pig  iron 

(soared  up  in  1899  to  $25  per  ton,  in  the  following 
year  the  price  settled  to  $14  per  ton,  in  1902  the  price 
again  mounted  to  $25  per  ton,  and  it  has  been  accom- 
panied by  great  fluctuations  in  price  ever  since. 
Money  on  call  has  been  soaring  all  the  way  from  10 
per  cent,  to  125  per  cent,  for  the  last  year,  and  the 
reason  of  these  conditions  is  very  apparent.  The  in- 
dustries of  a  country  should  be  based  upon  the  natu- 
ral laws  of  exchange.  These  laws  when  left  unob- 
structed prevail  with  as  much  steadiness  and  certainty 
as  the  law  of  gravitation.  Man  comes  in  with  his 
5J;aUli^s  obstructing  the  free  exchange  of  commodities, 
and  thereby  Ja^  an  artificial  basis  for  trade,  with  the 
result  of  uncertainty,  fluctuating  prices,  unstable 
markets  and  bankruptcy.  One  has  but  to  read  Eng- 
lish history  in  the  days  of  protection  and  our  own 
history  since  the  Civil  War  to  see  the  instability  and 
uncertainty  in  trade  created  by  protective  tarifi^s.  Be- 
fore the  repeal  of  the  Corn  Laws  England  experienced 


THE   TRUSTS  55 

unstable  markets,  riots,  strikes  and  bloodshed.  Again 
and  again  Parliamentary  inquiry  was  made  into  the 
causes  of  the  distress  which  pressed  so  heavily  upon 
both  the  agricultural  classes  and  the  operatives  of  the 
town.  Prices  of  wheat  fluctuated  from  53  shillings 
in  January,  1816,  to  112  shillings  in  June,  1817,  and 
by  the  following  September  it  had  fallen  to  74  shillings 
a  quarter.  In  our  own  country  the  depression  which 
lasted  from  1873  to  1879  resulted  from  overproduc- 
tion and  an  inability  to  sell  the  surplus  in  foreign 
countries.  Manufacturers  themselves  give  as  a  rea- 
son for  the  sale  of  commodities  abroad  for  less  than 
the  prices  prevailing  at  home  the  necessity  of  an  out- 
Tow  to  steady  business.  A  people  who  can  manul 
ture  cheaply  enough  to  largely  export  to  forei 
countries  as  a  rule  are  not  affected  by  great  fluctua-| 
tions  in  prices,  since  their  customers  are  not  the  peo- 
ple of  one  nation  but  of  many  nations,  and  when  the 
people  of  one  fail  others  take  their  place,  and  thus 
trade  is  natural  and  steady ;  but  with  us,  where  every 
few  years  there  is  a  change  in  the  tariff,  the  appre- 
hension of  danger  from  a  change  keeps  trade  in  un- 
certainty, and  the  tariff  itself  becomes  a  barrier  against 
exports  as  well  as  imports,  making  impossible  condi- 
tions  of  steac 

Protectionists  contend,  however,  that  trusts  exist 
in  free-trade  England,  and  that  because  of  their  ex- 
istence in  that  country  the  inference  is  justified  that 


56 


THE   TARIFF    AND   THE    TRUSTS 


our  protective  tariff  is  not  the  cause  of  the  trust.  In- 
dustrial combinations  in  the  form  of  monopolies  do  not 
exist  to  any  considerable  extent  in  England.  There 
are,  however,  causes  for  the  existence  of  combinations 
aside  from  protective  tariff's  which  operate  both  in 
England  and  the  United  States.  Any  combination 
y/of  men  who  obtain  ownership  or  control  of  the  natural 
supplies  of  a  necessary  of  life  has  even  a  more  com- 
plete foundation  for  monopoly  than  exists  by  reason 
of  a  tariff  like  ours.  The  whole  supply  of  anthracite 
oal  is  confined  to  a  small  portion  of  the  State  of 
Pennsylvania,  and  the  corporations  which  combine  and 
control  this  supply  have  the  basis  for  a  complete 
monopoly.  The  same  would  be  true  of  men  who  pos- 
sess the  whole  supply  of  diamonds  or  iodine  or  quick- 
silver or  petroleum.  The  essence  of  the  trust  is  to 
restrict  the  whole  of  the  supply  to  a  few  hands,  and 
I  the  essence  of  protection  is  to  restrict  competition  to 
the  inhabitants  of  a  limited  area ;  and  the  tariff  and 
the  trusts,  both  in  Germany  and  the  United  States, 
work  together  harmoniously,  so  that,  in  place  of  the 
ideal  increase  of  supply  through  competition,  the  tariff 
gives  us  repression  through  trusts.  Germany,  with 
its  protective  tariff,  has  over  four  hundred  trusts,  or 
cartels.  The  United  States,  with  its  higher  protective 
tariffs,  has  an  equal  number ;  but  England,  without 
I  any  such  restriction,  has  few  industrial  monopolies, 
•       since  the  moment  the  price  is  raised  above  the  price 


THE   TRUSTS  57 

of  the  like  foreign  product,  by  reason  of  the  undeviat- 
ing  laws  of  trade  and  commerce,  the  foreign  product 
comes  in  and  reduces  the  price.  Wilhelm  Berdrow,  a 
German  economist,  writing  in  the  May  Forum  of  1899 
upon  the  trusts  of  Europe,  says :  "As  far  as  England 
is  concerned,  it  must  be  admitted  that,  notwithstand- 
ing her  great  industrial  activity  and  competitive  war- 
fare, not  less  than  that  of  other  states,  the  trust  sys- 
tem has  as  yet  found  but  tardy  acceptance  in  that 
country.  This  is  doubtless  due  in  some  degree  to  the 
thorough  appreciation  of  the  principle  of  free  trade  ;^  "* 
for  it  is  well  known  that  the  largest  trusts  are  power- 
less unless  their  interests  are  secured  by  a  protective 
tariff  excluding  from  the  whole  market  the  product 
of  foreign  countries."  Thomas  Scanlon,  of  Liver- 
pool, writing  of  trusts  in  that  country  says:  "Leaving 
the  region  of  the  transport  traffic  and  surveying  the 
wide  area  of  British  industries  in  general,  it  cannot 
be  said  that  we  suffer  in  any  appreciable  degree  from 
combinations  of  producers  to  keep  up  prices.  That 
'trusts'  exist  in  free  trade  countries,  as  well  as  in  pro- 
tectionist countries,  is  undeniable,  but  while  in  the 
former  the  economy  in  production  which  results  from 
their  promotion  goes  to  benefit  the  consumer  in  the 
shape  of  reduced  prices,  in  the  latter  they  are  identi- 
fied with  high  prices  to  the  consumers  and  large  profits 
to  the  producers." 

The  greatest  and  the  wisest  of  our  American  pro- 


58  THE    TARIFF    AND  THE    TRUSTS 

tectionists  have  always  observed  the  natural  tendency 
of  protection  to  bring  about  monopoly.  In  1889  John 
Sherman  said:  "The  primary  object  of  a  protective 
tariff  is  to  secure  the  fullest  competition  by  individuals 
and  corporations  in  domestic  production.  If  such  in- 
dividuals or  corporations  combine  to  advance  the  price 
of  the  domestic  product  and  to  prevent  the  free  result 
of  open  and  fair  competition,  I  would,  without  a  mo- 
ment's hesitation,  reduce  the  duties  of  foreign  goods 
competing  with  them  in  order  to  break  down  the  com- 
bination." Mr.  Blaine,  in  his  "Twenty  Years  of  Con- 
gress" says:  ''Protection  in  the  perfection  of  its  design 
does  not  invite  competition  from  abroad,  but  is  based 
on  the  contrary  principle  that  competition  at  home 
Avill  always  prevent  monopoly  on  the  part  of  the  capital- 
ists, assure  good  wages  to  the  laboring  man  and  de- 
fend the  consumers  against  the  evil  of  extortion."  Mr. 
Andrew  Carnegie  is  quoted  in  the  American  Manufac- 
turer of  Pittsburg,  under  the  date  of  July  25,  1884,  as 
saying:  "We  are  the  creatures  of  the  tariff,  and  if  ever 
the  steel  manufacturers  here  attempt  to  control  or 
have  any  general  understanding  among  them,  the 
tariff  would  not  exist  one  session  of  Congress.  The 
theory  of  protection  is  that  home  competition  will 
soon  reduce  the  price  of  the  product  so  it  will  yield  only 
the  usual  profit ;  any  understanding  among  us  would 
simply  attempt  to  defeat  this.  There  never  has  been 
nor  ever  will  be  such  an  understanding."     Not  only 


THE   TRUSTS  59 

does  such  an  understanding  exist  now  between  hun- 
dreds of  separate  manufacturers  in  this  country,  but 
there  are  hundreds  of  actual  corporate  monopolies, 
and  such  monopolies  absolutely  control  the  price  of 
nearly  every  necessary  of  life. 

The  worst  abuses  are  sometimes  destroyed  by  the 
very  completeness  of  their  triumph  and  for  this  rea- 
son let  us  examine  the  abuses  of  some  of  these  trusts. 
The  other  day  in  the  Federal  Court  at  St.  Paul  twenty 
corporations,  united  in  the  trust  known  as  The  In- 
ternational Paper  Company,  which  has  sold  practical- 
ly ninety  per  cent,  of  the  paper  product  of  the  country, 
plead  guilty  under  the  Sherman  Interstate  Trust  Law 
to  the  offence  of  restraining  and  monopolizing  the 
trade  in  paper  and  the  price  in  paper  has  materially  fal- 
len. Let  us  examine  this  admitted  monopoly.  The 
source  of  our  information  as  to  this  trust  is  the  testi- 
mony of  Mr.  John  Norris,  the  business  manager  in 
1901  of  the  New  York  Times,  given  before  the  Indus- 
trial Commission  on  April  12th  of  that  year.  For 
eighteen  years  prior  to  the  passage  of  the  DingleyAct 
there  had  been  a  steady  downward  tendency  in  the 
price  of  news  print  paper.  This  tendency  came  from 
the  substitution  of  wood  for  rags  in  making  pulp  and 
by  reason  of  great  improvement  in  the  machinery  and 
methods  of  manufacture  of  paper.  Within  a  period  of 
seven  years  prior  to  the  Dingley  Act  the  speed  of  paper- 
making  machines  was  increased  from  200  to  500  feet  of 


6o  THE    TARIFF    AND   THE    TRUSTS 

product  per  minute,  and  the  width  of  the  paper  was 
increased  to  162  inches.  Pulp  made  in  adjoining  mills 
was  pumped  in  a  liquid  state  from  the  pulp  mill  to 
the  paper  mill,  saving  a  dollar  a  ton  upon  the  manufac- 
ture in  that  one  item.  The  conversion  of  water  power 
into  electric  power  and  its  transmission  by  wire  also 
contributed  to  cheapen  the  cost  of  manufacture.  The 
stimulus  given  to  the  manufacture  of  the  paper  known 
as  news  print  resulted  in  an  increase  of  capacity  per 
day  during  the  year  1896  of  about  400  tons.  Pulp 
wood  was  during  that  year  cut  from  the  cheap  timber 
lands  in  Canada  and  imported  free  of  duty,  but  there 
was  a  duty  of  10  per  cent,  ad  valorem  on  wood-pulp, 
and  it  amounted  to  about  $1.20  per  ton.  The  duty  on 
news  print  paper  was  15  per  cent,  or  $3  per  ton,  but 
no  news  print  paper  was  imported.  This  was  the  sit- 
uation when  a  committee  of  paper  manufacturers  ap- 
peared before  the  Ways  and  Means  Committee  on 
December  31,  1896,  and  urged  an  increase  in  the  tariff 
on  pulp  and  paper.  This  committee  stated  to  the 
Ways  and  Means  Committee  that  in  case  an  increase 
in  duties  was  granted  to  them,  it  would  not  result  in 
any  increase  in  the  price  of  paper,  and  upon  that 
understanding  the  duty  on  mechanically  ground  wood 
was  increased  from  10  per  cent.,  or  an  average  of  $1.20 
per  ton  to  $1.67  per  ton,  and  the  duty  on  news  print 
paper  costing  less  than  two  cents  per  pound  was  raised 
from  15  per  cent.,  or  $3  per  ton,  to  30  cents  per  100 


THE   TRUSTS  6l 

pounds,  or  $6  per  ton.  Prior  to  that  enactment  no 
news  print  paper  had  been  imported  into  the  United 
States,  and  the  government  derived  no  revenue  there- 
from, because  the  American  mills  could  make  paper 
more  cheaply  than  any  other  mills.  With  the  law 
practically  prohibiting  all  foreign  competition  the  In- 
ternational Paper  Company  filed  articles  of  incorpora- 
tion in  New  York  State  on  January  31,  1898.  Its 
capital  stock  was  $45,000,000  and  power  was  given 
to  issue  $10,000,000  in  bonds.  About  all  the  large 
paper  mills  of  the  country  were  merged  into  the 
company,  producing  about  eighty  per  cent,  of  the 
American  output.  The  result  of  this  duty  and  this 
trust  was  that  the  newspapers  had  to  pay  $8  per  ton 
more  for  their  paper  after  the  consolidation ;  and  be- 
tween the  time  of  the  combination  and  the  time  when 
Mr.  Norris  gave  his  testimony  before  the  Industrial 
Commission  the  trust  had  received  an  increase  of 
three  and  one-third  million  dollars  per  annum  as  a 
result  of  the  tariff  and  the  suppression  of  competition. 
The  increase  in  the  cost  of  paper  for  two  large  news- 
papers alone  was  $150,000  per  annum  each.  The 
United  States  Government  and  the  Dominion  of  Can- 
ada in  1898  each  appointed  Commissioners  known  as 
the  Joint  High  Commission  to  establish,  if  possible, 
reciprocal  relations  between  our  country  and  Canada, 
reducing  as  against  each  other  existing  tariffs.  The 
International    Paper    Company   appeared   before    this 


02  THE    TARIFF    AND   THE    TRUSTS 

Commission  and  opposed  all  changes.  The  Canadian 
people  resented  the  attitude  of  the  International 
Company,  and  retaliated  upon  American  users  of  its 
logs,  who  had  previously  obtained  their  supplies  with- 
out any  export  duty.  The  Province  of  Ontario  pro- 
hibited the  export  of  any  logs  cut  from  crown  lands. 
The  Province  of  Quebec  imposed  a  license  fee  of  $1.50 
per  cord  upon  all  logs  cut  for  American  use.  The 
result  was  that  the  International  Paper  Company  and 
other  paper  companies  have  been  cutting  off  our 
forests  at  the  rate  of  about  1700  square  miles  per 
annum.  The  Dominion  of  Canada  has  forests  of 
spruce  from  the  east  border  of  Labrador  to  the  Yukon, 
from  the  St.  Lawrence  north  to  Hudson  Bay,  and 
could  easily  furnish  us  our  wood-pulp,  while  our  own 
forests  because  of  their  devastation  by  paper  compa- 
nies and  chemical  companies  are  becoming  limited. 
Is  not  the  preservation  of  our  forests  a  matter  of  suffi- 
cient importance  to  attract  the  attention  of  statesmen? 
Shall  we  impose  high  duties  upon  paper,  and  thereby 
encourage  paper  companies  to  destroy  them?  The 
flow  of  our  rivers,  climatic  conditions,  irrigation,  and 
many  other  considerations  make  it  of  the  greatest  im- 
portance that  our  remaining  forests  be  preserved. 
The  stock  of  this  paper  company,  like  the  stock  of 
most  of  this  class  of  corporations  was  heavily  watered. 
The  promoters  of  such  corporations  do  not  call  it 
w^ater,  they  simply  appraise  as  an  asset  the  value  of  the 


THE   TRUSTS  63 

privilege   which   our  government   gives   the    corpora- 
tion by  the  tariff  to  plunder  the  American  people. 

The  borax  trust  is  the  best  example  of  the  evils  of 
tariff  protection  which  we  have  in  this  country. 
Everything  in  a  trust  which  is  subject  to  censure  is 
displayed  to  the  best  advantage  by  this  combination, 
increased  prices,  restricted  production,  lovv-er  prices  to 
foreigners  than  to  x\mericans,  and  false  and  hypocrit- 
ical pleas  that  free  borax  would  destroy  the  borax 
industry.  This  trust  is  a  world  trust,  and  it  teaches 
us  that  a  world  trust  cannot  sell  its  product  in  Eng- 
land, where  foreign  competition  is  unrestricted,  at  the 
prices  which  it  exacts  from  Americans.  The  prin- 
cipal borax  deposits  of  the  world  are  in  California  and 
Nevada,  Asia  Minor,  Peru  and  Chili ;  but  the  largest 
and  the  most  easily  worked  and  the  most  productive 
mines  are  those  in  California.  The  McKinley  Tariff 
imposed  duties  on  borax  and  all  boracic  acids  of  5 
cents  per  pound,  the  Wilson  Tariff  reduced  the  duty 
on  borax  to  2  cents,  on  boracic  acid  to  3  cents,  and  on 
borate  of  lime  to  ij^  cents.  The  Dingley  Tariff  made 
the  duty  on  borax  and  boracic  acid  5  cents,  and  in- 
creased the  duties  on  borates.  The  Pacific  Coast 
Borax  Company  owned  the  California  and  Nevada 
deposits,  and,  through  Senator  White,  of  California, 
and  Senator  Stewart,  of  Nevada,  it  procured  from 
Congress  in  the  Dingley  Bill  this  excessive  tariff ;  then, 
with  this  duty  as  a  large  asset,  it  sold  its  property  to 


64  THE    TARIFF    AND    THE    TRUSTS 

the  Borax  Consolidated  Works,  Limited,  an  English 
Company  with  a  capital  of  $7,000,000.  In  September, 
1897,  the  British  and  Colonial  Druggist,  an  English 
trade  newspaper,  explained  the  ability  of  the  American 
producers  to  compete  in  the  markets  of  the  world  by 
saying  that  to  the  natural  advantages  in  the  matter  of 
deposits  of  pure  borax  was  added  an  extremely  heavy 
duty  on  borax,  which  practically  barred  the  foreign 
product  from  entry  into  the  States.  It  said :  "We  can 
put  this  advantage  in  a  startling  way  by  saying  that, 
if  the  American  manufacturers  obtained  for  their 
borax  sold  at  home  the  present  price  of  the  article  in 
this  country  plus  the  duty  in  America,  they  would  be 
in  a  position  to  give  away  one  and  a  half  times  aS( 
much  borax  as  they  sold  at  home  and  yet  receive  a 
return  per  pound  on  the  whole  higher  than  the  present 
English  price  per  pound."  On  October  28,  1899,  the 
price  of  borax  in  London  where  the  main  office  of  the 
company  is,  was  ^V^  cents  per  pound,  as  against  734 
cents  in  New  York.  The  same  company  supplies 
borax  from  the  same  mines  and  mills  to  both  markets 
and  this  disparity  in  prices  has  continued  between 
England  and  the  United  States  down  till  the  present 
day.  A  London  newspaper  in  1904  said :  "The  Amer- 
ican duty  on  imported  borax  is  5  cents  per  pound. 
The  home  price  in  the  United  States  is  about  y^  cents 
per  pound,  and  the  export  price  is  about  2^^  cents,  so 
that  we  get  the  productions  of  borax  at  one-third  the 


THE   TRUSTS  ■6$ 

price  which  the  people  in  the  United  States  do.  The 
average  annual  dividends  of  the  borax  trust  from  the 
time  of  its  formation  to  1904  were  165^  per  cent." 
The  borax  trust  is  an  English  trust.  It  exploits 
Americans ;  but,  by  reason  of  free  trade  in  England, 
it  must  sell  its  own  people  borax  at  its  value  in  the 
markets  of  the  world.  Will  protectionists  contend 
for  a  moment  that  it  is  for  our  advantage  to  aid  by 
protective  duties  such  a  foreign  monopoly? 

The  Pittsburg  Plate  Glass  Company  has  a  capital 
of  $10,000,000.  In  1899  it  controlled  682  out  of  946 
pots  in  the  manufacture  of  glass,  and  it  increased  the 
prices  of  plate  glass  within  three  years  150  per  cent., 
as  described  in  the  prior  chapter.  It  had  an  under- 
standing in  1900  with  other  companies,  and  thus  con- 
trolled the  prices  of  plate  glass.  According  to  the 
testimony  of  Mr.  Fred  G.  Elliott,  the  manager  of 
John  Lucas  &  Co.,  before  the  Industrial  Commission 
on  December  20,  1900.  the  Pittsburg  Plate  Glass 
Company  sent  to  the  firm  of  John  Lucas  &  Co.  a  letter 
of  which   the   following  is  a  copy : 

Philadelphia,  Pa.,   Oct.   27,   1900. 
Gentlemen : 

We  have  just  been  advised  by  our  general  office  that  any 
permission  that  has  been  given  to  the  jobbers  whereby  they 
were  allowed  to  import  plate  glass  must  be  at  once  withdrawn, 
and  we  hereby  beg  to  notify  you  to  this  effect. 

We  will  ask  you  to  send  to  this  office  at  once,  a  mem- 
orandum of  any  foreign  glass  which  you  may  have  ordered 
5 


66  THE    TARIFF    AND  THE    TRUSTS 

which  you   have  not   received.     Please   include   in   this   mem- 
orandum that  which  may  already  be  on  the  water  as  well  as 
the    portion    that    has    not    yet    been    shipped    from    abroad. 
Kindly  give  this  matter  your  prompt  attention,  and  oblige 
Yours  truly, 

Pittsburg  Plate  Glass  Company. 

This  letter  was  followed  in  November  by  another 
letter  of  which  the  following  is  a  copy : 

Philadelphia,  Pa.,  Nov.  30,  1900. 
Gentlemen : 

At  a  meeting  of  the  manufacturers  and  "A"  jobbers  of 
plate  glass  in  Pittsburg  on  the  14th  instant,  it  was  resolved 
that  no  "A"  or  "B"  buyers  would  be  permitted  to  import  plate 
glass  or  to  purchase  plate  glass  that  had  been  imported  into 
this  country.  The  manufacturers  will  expect  all  the  "A"  and 
"B"  buyers  to  conform  strictly  to  this  resolution. 
Yours  truly, 

Pittsburg  Plate  Glass  Company. 

Was  ever  a  people  in  the  world  brought  into  bondage 
under  such  petty  industrial  tyrants  as  these?  This 
kind  of  tyranny  has  been  carried  quite  far  enough. 
No  retail  druggist  can  obtain  goods  from  a  wholesale 
druggist  or  manufacturer  of  a  proprietary  medicine 
unless  such  retail  druggist  becomes  a  member  of  the 
National  Association  of  Retail  Druggists  and  agrees 
to  observe  the  established  prices  at  which  drugs  and 
proprietary  medicines  shall  be  sold  to  the  consumer, 
and  if  he  fails  to  obey,  he  is  immediately  placed  upon 
the  list  of  what  is  known  as  "aggressive  cutters,"  and 
thenceforth  is  unable  to  purchase  from  the  manufac- 
turer.    The    Tobacco    Trust,    the    Diamond    Match 


THE   TRUSTS  67 

Company,  the  National  Biscuit  Company,  the  Sugar 
Trust,  the  Watch  Trust,  and  the  collar,  cuff  and  shirt 
makers  are  all  reputed  as  saying  to  their  customers: 
"Buy  of  us,  and  only  of  us,  if  you  wish  to  continue 
to  do  business."     Many  of  them  allow  reductions   in 
case  such  conduct  is  pursued,  and  prescribe  the  ter- 
ritory in  which  the  dependent  manufacturer  can  sell 
his    goods.     In    1903    the    Canadian    Manufacturers' 
Association  and  the  American  Manufacturers'  Asso- 
ciation,   according  to   Mr.    Wade,    a   member    of  the 
Canadian  Parliament,  had  gotten  together  and  fixed 
the  prices   to   be   charged   throughout   Canada.     Mr. 
Wade  said,  in  a  speech  before  the  Canadian  Parlia- 
ment :  "Let  me  illustrate  what  I  mean.     I  will  take 
one  class  of  manufacturers,  and  I  will  show  how  they 
deal  with  the  country.     I  have  under  my  hands  some 
papers.     I  will  take  hardware  for  instance,  cut  nails, 
wire  nails,  tarred  paper,  pressed  spikes,  tacks,  lantern 
ropes,   lead   pipes,   shot,  bolts,   and  nuts,   tile  bolts, 
screens,  carriage  bolts,  bolt  ends,  varnishes,  shovels, 
coach  screws,  wire  of  all  sorts,  nuts,  axes,  wooden- 
ware,  wire  doors,  wire  screens,  coal  hods,  stove-pipes, 
elbows,    locks    and    knobs,    white    lead    and    putty. 
There   is  an    association   of  these   gentlemen   and    I 
mean  to  say  to  this  House  that  no  wholesale  dealer 
in  Canada  can  buy  a  dollar's  worth  of  any  of  these 
articles  from  any  one  of  the  members  of  this  Asso- 
ciation until  he  enters  into  a  binding  agreement  that 


68  THE    TARIFF    AND   THE   TRUSTS 

"he  will  not  purchase  from  any  other  parties  outside 
"the  association,  that  he  will  not  sell  for  a  less  price 
"than  that  dictated ;  and  then  they  will  not  really  sell 
"him  the  goods  but  allow  him  a  return  commission  for 
"selling  them.  They  dictate  the  price  at  which  he  shall 
"sell  them  and  compel  him  to  buy  from  them,  and  after 
"that  they  require  him  at  stated  periods  each  year,  or 
"each  six  months  or  each  month,  to  make  a  statutory 
"declaration  that  he  has  performed  all  these  conditions. 
"Let  me  read  to  the  House  an  extract  I  have,  an  ex- 
"tract  from  a  contract  that  they  require  the  dealer  to 
"enter  into.  This  is  the  statement  of  the  shot  men, 
"and  I  will  refer  the  honorable  gentlemen  to  the  well- 
"known  firm  in  Toronto  of  Jenkins  &  Harding,  who 
"are  the  agents  for  a  number  of  these  concerns : 

SHOT 

January  8,   1903. 
Dear  Sirs : 

We  beg  to  advise  you  that,  subject  to  the  following  con- 
ditions, you  may  be  entitled  to  a  premium  of  2^2  per  cent, 
upon  the  net  amount  of  your  purchases  of  shot  (commencing 
to-day)  in  each  six  months  ending  June  30  and  December 
31,  same  to  be  payable  within  30  days  after  the  expiration  of 
each  six  months  upon  which  premium  applies.  Conditions : 
that  we  receive  from  you,  after  the  end  of  each  six-months' 
period  ending  June  30  or  December  31,  a  declaration  which 
satisfies  us  that  in  the  six  months  upon  which  you  are  ap- 
plying for  premium  you  have  not  imported  or  purchased 
shot  from  any  manufacturer  other  than  those  whose  names 
appear  below,  and  that  you  have  not  directly  or  indirectly 
offered  or  sold  shot  at  less  than  established  prices  of  the 
Shot  Association  of  Canada  to  the  retail  trade,  or  upon  more 


THE   TRUSTS  69 

favorable  terms  to  your  customers  than  the  established  terms 
of  the  said  Association  to  the  retail  trade.  We  reserve  the 
right  to  revoke  and  cancel  all  or  part  of  this  proposition  at 
any  time  on  notice  to  you  by  registered  letter  of  our  desire 
and  intention  to  do  so,  but  not  thereby  to  relieve  ourselves 
of  any  obligations  which  may  have  accrued  on  your  above 
described  purchases  of  shot  up  to  date  of  said  revocation." 

Mr.  Wade  continues :  "I  will  state  further  that  I 
"have  been  informed,  and  believe,  that  the  prices  which 
"are  fixed  by  the  Canadian  manufacturers  to-day 
"throughout  Canada  for  all  hardware  are  prices  which 
"are  agreed  upon  by  them  in  conjunction  with  the 
"American  Manufacturers'  Association.  Not  very 
"long  ago  I  chanced  to  hear  a  conversation  which  was 
"taking  place  between  a  strong  supporter  of  the  Con- 
"servative  party,  a  wholesale  merchant,  and  another 
"gentleman,  and  he  made  this  statement :  'It  is  no  use 
"for  us  to  talk  about  it,  we  in  the  wholesale  trade  are 
"absolutely  at  the  mercy  of  the  manufacturers  of 
"Canada,  and  they  are  in  affiliation  with  the  manufac- 
"turers  of  the  United  States.'  "  Now  the  explanation 
of  the  whole  matter  is  this:  before  1890  we  exported 
and  sold  to  Canadians,  and  have  ever  since  continued 
selling,  the  articles  in  hardware  enumerated  by  Mr. 
Wade,  being  able  to  undersell  the  manufacturers  of 
like  articles  in  England.  Mr.  Blaine,  in  an  article  up- 
on the  subject  in  the  North  American  Rcvieiv  for  Jan- 
uary, 1890,  enumerated  many  of  these  very  articles  as 
having  been   exported   for   a   considerable   period   of 


70  THE    TARIFF    AND   THE   TRUSTS 

time  to  Canada  by  our  hardware  men  and  there  sold 
in  competition  with  EngHsh  hardware,  and  he  added 
that  we  could  manufacture  these  articles  in  hardware 
cheaper  than  the  English  could,  and  that  we  could 
pay  the  same  duty  that  England  paid  and  undersell 
her  in  Canadian  markets.  Our  exporters  of  hardware, 
however,  do  not  wish  articles  sold  by  the  Canadian 
jobbers  and  retailers  so  near  home  to  be  cheaper  than 
they  are  sold  in  our  market,  so  they  have  entered  in- 
to an  agreement  with  the  Canadian  Association  requir- 
ing them  to  keep  up  the  price  lest  the  cheaper  prices  in 
Canada  may  be  used  as  an  argimient  to  do  away  with 
the  duties  on  the  hundreds  of  articles  of  hardware 
protected  in  the  Dingley  Bill,  Many  a  competitor  is 
in  a  position  to  beat  the  trust  in  a  contest  of  cut-throat 
competition  if  only  the  trust  were  compelled  to  make 
its  prices  uniform  to  all  customers,  but  with  its  ample 
funds  it  will  seek  out  the  independent  competitor  in 
one  locality  and  another,  and  by  reducing  its  prices 
there  will  drive  him  out  of  the  business.  Our  trusts 
even  coerce  the  national  government  into  purchasing 
from  them  at  higher  prices  than  it  can  purchase  the 
same  material  in  European  markets.  The  Isthmian 
Canal  Commission  recently  purchased  20,000  barrels 
of  English  cement  at  a  saving  of  '^^j  cents  a  barrel  on 
the  price  demanded  by  the  American  manufacturers; 
but  when  Secretary  Taft  appeared  before  the  Senate 
Committee  on  Finance  and  urged  that  Congress  give 


THE   TRUSTS  yi 

the  Panama  Canal  Commission  authority  to  purchase 
two  steel  dredges  in  the  foreign  market  in  Scotland 
for  $654,000,  instead  of  accepting  the  American  bid 
for  the  same  kind  and  quality  of  dredges  at  $724,000, 
the  Senate  Finance  Committee  refused,  and  finally 
Congress  directed  that  the  materials  to  be  used  in  the 
canal  should  be  purchased  from  American  manu- 
facturers, unless  the  President  determined  that  the 
prices  fixed  were  excessive.  So  the  taxpayers  must 
pay  the  bill  for  the  purpose  of  continuing  the  prosper- 
ity of  these  monstrous  trusts. 

The  evils  of  our  protective  tariffs  have  been  greatly 
mitigated  by  the  fact  that  under  the  Constitution  of 
the  United  States  we  have  absolute  free  trade  between 
fifty  states  and  territories,  an  area  covering  upwards 
of  three  and  a  half  million  square  miles ;  but  when  the 
trust  is  established  the  very  largeness  of  our  country 
results  in  the  largeness  and  success  of  the  trust.  So 
vast  a  field  secured  to  them  from  outside  competition 
is  tempting  enough  to  invoke  the  energies  of  immense 
capital  for  its  exploitation,  and  as  a  result  gigantic 
trusts  protected  by  the  tariff  come  into  existence  with 
a  power  for  evil  in  trade  and  politics  which  would  be 
impossible  in  a  small  country,  however  high  might  be 
the  tariff  sheltering  them  from  competition.  Under 
no  conditions  of  high  tariff  in  any  other  country  in 
the  world  could  you  get  such  a  vast  trust  as  the  United 
States   Steel  Corporation,  because  there  is  no  other 


^2  THE   TARIFF    AND   THE    TRUSTS 

country  with  such  a  large  body  of  consumers  able  to 
pay  high  prices  for  products.  There  has  not  been  a 
trust  dependent  upon  the  tariff  formed  within  the  last 
ten  years  which  has  not  capitalized  its  right  to  plunder 
and  to  continue  to  plunder  the  American  people,  and 
as  a  rule  that  privilege  has  been  counted  as  equivalent 
to  all  the  other  assets  of  the  company.  The  United 
States  Steel  Corporation  is  our  best  illustration  of 
this  kind  of  gigantic  trust.  It  is  capitalized  at  $1,404,- 
000,000.  Its  alleged  capital  is  1-67  of  the  total  wealth 
of  the  United  States  in  1900  and  it  produced  i-io  of 
its  entire  manufactures  in  that  year.  If  its  stocks  and 
bonds  had  been  issued  in  the  shape  of  $90  shares,  it  is 
said  that  there  would  have  been  one  for  each  family 
in  the  United  States,  or  if  their  face  value  was  divided 
among  the  people,  there  would  have  been  at  the  time 
of  its  formation  about  $18  for  each  man,  woman  and 
child  in  the  United  States,  or  about  90  cents  for  each 
man,  woman  and  child  on  the  face  of  the  earth.  The 
different  corporations  associated  together  control  over 
213  different  manufacturing  and  transportation  plants 
and  companies.  41  different  mines  located  in  18  differ- 
ent states,  and  upwards  of  100  large  steamers  upon 
the  lake,  those  recently  built  being  600  feet  boats  and 
handling  between  13,000  and  14,000  tons  of  ore.  It 
owns  the  largest  deposits  of  iron  ore,  limestone  and 
coke  in  the  v/orld.  It  is  closely  allied  with  a  large 
number  of  other  corporations  and  with  railways,  and 


THE   TRUSTS  73 

it  is  of  such  vast  power  and  wealth  that  it  cannot  well 
be  compared  with  any  other  in  the  world.  In  1899 
Mr.  Charles  M.  Schwab,  who  became  the  first  presi- 
dent of  the  company,  wrote  a  letter  to  Henry  C.  Frick, 
in  which  he  stated  that  steel  rails  could  be  made  for 
less  than  $12  a  ton,  whilst  the  cost  to  produce  them  in 
England  was  $19  a  ton,  and  that  like  diflferences  ex- 
isted in  the  cost  as  to  other  steel  products.  Yet  this 
gigantic  corporation  is  now  and  for  several  years  past 
has  been  selling  its  steel  rails  to  our  railroads  for  $28 
per  ton,  and  exporting  them  all  over  the  world  for 
about  $20  to  $22  per  ton.  At  the  present  time  it  has 
an  understanding  with  the  makers  of  rails  in  Germany 
and  England  not  to  sell  in  their  home  markets  below 
certain  prices  and  to  sustain  the  prices  of  rails  in  neu- 
tral markets ;  but  it  is  exporting  its  steel  billets  and 
blooms,  its  steel  plates  and  bridges,  its  barb  wire,  wire 
nails  and  tin  plate,  its  tubes  and  pipes  to  every  part 
of  the  world  and  selling  them  at  prices  greatly  re- 
duced from  the  home  price.  Before  the  Chamberlain 
Commission,  which  during  the  years  1903  and  1904 
was  engaged  in  taking  testimony  as  to  the  conditions 
of  trade  in  England,  witness  after  witness  appeared 
and  testified  as  to  the  prices  of  these  products  of  the 
United  States  Steel  Association  sold  to  Englishmen, 
and  it  appeared  from  this  testimony  that  invariably 
they  were  sold  for  from  twenty-five  per  cent,  to  forty 
per  cent,  below  the  price  for  which  they  were  sold  to 


74  THE   TARIFF    AND   THE    TRUSTS 

the  American  people.  Evidence  to  the  same  effect  has 
been  presented  in  the  Senate  by  Sen.  Bacon,  and  finally 
the  fact  has  been  admitted  by  Congressman  Dalzell,  of 
Pennsylvania,  in  the  House  of  Representatives. 

Hundreds  of  other  trusts,  not  so  vast  as  the  steel 
trust,  but  just  as  oppressive  in  their  extortions,  have 
been  formed  to  avail  themselves  of  the  tariff.  The 
following  are  good  examples  of  trusts  fostered  by  the 
tariff : 

The  Meat  Trust,  a  combination  of  the  National 
Packing  Company,  Armour  &  Company,  Swift  & 
Company,  John  P.  Squire  &  Company,  Schwarzschild 
&  Sulzberger  Company,  St.  Louis  Dressed  Beef  and 
Provision  Company,  Northern  Packing  &  Provision 
Company,  Libby,  McNeil  &  Libby,  protected  by  2  cents 
a  pound  on  beef  and  pork  and  5  cents  a  pound  on 
bacon  and  ham,  practically  controlling  the  whole 
market  and  fixing  the  price  on  the  domestic  product 
at  a  price  equal  to  that  of  i860,  when  butchers 
slaughtered  animals  by  hand  and  availed  themselves 
in  no  way  of  the  by-products.  This  trust  is  also  pro- 
tected on  most  of  its  by-products. 

The  Standard  Oil  Company  controlling  20  different 
companies,  with  an  authorized  capitalization  of  $102,- 
000,000.  protected  on  many  of  its  by-products  by  heavy 
duties,  and  by  rebates  on  its  imported  tin  cans  of 
ninety-nine  per  cent,  of  the  duty.* 

*  Both    the    Standard   Oil   Company   and   the  Anthracite   Coal 


THE   TRUSTS  75 

The  American  Linseed  Company,  combining  47 
different  companies,  with  an  authorized  capital  stock 
of  $50,000 ,ocX),  representing  eighty-five  per  cent,  of 
the  Hnseed  oil  production  of  the  United  States,  and 
under  the  domination  of  the  Standard  Oil  Company. 

The  National  Lead  Company  with  an  authorized 
capital  stock  of  $30,000,000,  comprising  26  plants,  and 
under  the  domination  of  the  Standard  Oil  Company. 

The  United  Lead  Company,  combining  19  different 
companies,  and  also  under  the  domination  of  the 
Standard  Oil  Company. 

The  American  Sugar  Refining  Company,  control- 
ling 55  different  companies,  representing  from  seventy 
to  ninety  per  cent,  of  the  product,  with  a  total  capital 

Combination  have  procured  import  duties  on  oil  and  anthracite 
coal  in  a  manner  not  generally  known.  Hidden  away  in  the  free 
list  of  the  Dingley  Bill  is  the  provision  that  petroleum  should  be 
admitted  free  of  duty  provided  "That  if  there  be  imported  into 
the  United  States  crude  petroleum,  or  the  products  of  crude  pe- 
troleum produced  in  any  country  which  imposes  a  duty  on 
petroleum  or  its  products  exported  from  the  United  States,  there 
shall  in  such  cases  be  levied,  paid,  and  collected,  a  duty  upon 
said  crude  petroleum  or  its  products  so  imported  equal  to  the 
duty  imposed  by  such   country." 

The  Russian  duty  on  imports  of  petroleum  is  from  150 
per  cent,  to  250  per  cent,  and  Russia  is  the  only  country  which 
can  export  petroleum  to  this  country.  So  that  for  all  practical 
purposes  the  Standard  Oil  Company  is  protected  from  foreign 
competition   by   a   duty   of    150   to    200   per   cent. 

The  provision  as  to  duty  on  coal,  paragraph  415  of  the  Ding- 
ley  Bill,  is  as  follows :  "Coal  bituminous  and  all  coal  contain- 
ing less  than  92  per  cent,  of  fixed  carbon  and  shale,  67  cents  per 
ton  of  28  bushels,  80  pounds  to  the  bushel"  ;  but  the  Welsh  an- 
thracite coal,  which  alone  would  come  into  competition  with  the 
anthracite  coal  of  the  coal  combination,  contains  less  than  92 
per  cent,  of  fixed  carbon.  So  that  both  bituminous  and  anthra- 
cite coal  are  protected  to  the  amount  of  67  cents  per  ton. 


76  THE   TARIFF    AND   THE    TRUSTS 

issued  of  the  parent  and  affiliated  companies  of  $145,- 
000,000. 

The  International  Harvester  Compan}-,  controlling 
6  plants,  with  an  authorized  capitalization  of  $120,000,- 
000,  'Controlling  seventy  per  cent,  of  the  industry. 

The  American  Brass  Company,  with  an  authorized 
capitalization  of  $20,000,000  and  controlling  9  plants. 

The  xA.merican  Thread  Company,  with  an  authorized 
capitalization  of  $12,000,000,  owning  or  controlling  13 
different  plants,  controlling  fifty  per  cent,  of  the  in- 
dustry. 

The  Casein  Company  of  America,  known  as  the 
Milk  Sugar  Trust,  with  a  total  capital  issued  of  $6,- 
492,000,  owning  5  different  plants  and  controlling 
seventy  per  cent,  of  the  industry. 

The  Chicago  Pneumatic  Tool  Company,  with  a 
capitalization  of  about  $8,000,000,  owning  7  plants 
and  controlling  eighty  per  cent,  of  the  industry. 

The  Central  Foundry  Company,  known  as  the  Soil 
Pipe  Trust,  with  a  capitalization  of  $14,000,000,  own- 
ing 13  plants  and  controlling  eighty  per  cent,  of  the 
industry. 

The  Diamond  Match  Company,  with  an  authorized 
capital  stock  of  $15,000,000,  owning  18  plants  and 
controlling  eighty-five  per  cent,  of  the  industry. 

The  International  Steam  Pump  Company,  known  as 
The  Steam  Pump  Trust,  with  an  authorized  capital  of 
$25,000,000,  owning  8  plants  and  controlling  eighty 


THE   TRUSTS  ^^ 

per  cent,  of  the  product. 

The  General  Chemical  Company,  with  an  authorized 
capital  of  $25,000,000,  controlling  seventy  per  cent, 
of  the  trade  and  24  chemical  plants. 

The  American  Woolen  Company,  with  a  capital  of 
$25,000,000  preferred  stock  and  $40,000,000  common 
stock,  having  about  30  plants  and  controlling  upwards 
of  sixty  per  cent,  of  the  sales. 

The  California  Fruit  Canners'  Association,  with  a 
capital  stock  of  about  $3,500,000,  including  18  dififerent 
fruit  companies,  and  controlling  sixty-five  per  cent, 
of  the  trade. 

The  Glucose  Trust,  controlling  5  companies,  with 
20  plants,  including  the  National  Starch  Company  and 
the  Illinois  Sugar  Refining  Company,  having  an 
authorized  capital  stock  of  $30,000,000  preferred  and 
$50,000,000  common  stock  and  controlling  a  large  part 
of  the  sales  in  the  United  States. 

The  Candy  Trust,  with  a  capital  stock  of  $9,000,000, 
including  16  different  plants,  and  controlling  over 
fifty-five  per  cent,  of  the  sales  of  candy. 

The  National  Enameling  and  Stamping  Company, 
having  a  capital  stock  of  $30,000,000  and  controlling 
13  plants  and  fifty-five  per  cent,  of  the  industry. 

The  Glassware  Trust,  with  an  authorized  capital 
stock  of  about  $5,500,000,  having  19  plants  and  con- 
trolling about  seventy  per  cent,  of  the  sale  of  glass- 
ware. 


78  THE    TARIFF    AND    THE    TRUSTS 

The  Rubber  Goods  Manufacturing  Company,  hav- 
ing a  capital  stock  of  $50,000,000  and  17  plants  and 
controlling  about  sixty  per  cent,  of  the  sales. 

The  United  Button  Company,  having  a  capital  stock 
of  $3,000,000  and  controlling  3  plants. 

The  Aeolian  Weber  Piano  and  Pianola  Company, 
having  a  capital  stock  of  $10,000,000  and  owning  12 
plants. 

The  Allis-Chalmers  Company,  known  as  The 
Machinery  Trust,  having  a  capital  stock  of  about  $36,- 
250,000,  controlling  4  large  plants  and  fifty  per  cent, 
of  the  trade. 

The  American  Agricultural  Chemical  Company, 
known  as  the  Fertilizer  Trust,  having  a  capital  stock 
of  about  $35,000,000  and  40  fertilizer  plants. 

The  American  Can  Company,  known  as  the  Tin  Can 
Trust,  being  closely  allied  with  the  American  Tin 
Plate  Company,  and  having  a  capital  of  $88,000,000 
and  123  plants  and  controlling  about  seventy-five  per 
cent,  of  the  trade. 

The  American  Cement  Compan}-,  known  as  the 
Cement  Trust,  having  a  capital  of  about  $2,000,000 
and  controlling  6  plants. 

The  American  Cotton  Oil  Company,  known  as  the 
Cotton  Oil  Trust,  having  a  capital  stock  of  about 
$33,000,000  and  30  plants  and  controlling  about  sixty- 
five  per  cent,  of  the  industry. 

The   American  Felt  Company,  known  as  the   Felt 


THE   TRUSTS  79 

Trust,  having  a  capital  of  about  $4,000,000  and  5  plants 
and  controlling  about  sixty  per  cent,  of  the  industry. 

The  American  Glue  Company,  having  a  capital 
stock  of  about  $3,000,000  and  9  plants  and  controlling 
fifty-five  per  cent,  of  the  industry. 

The  American  Hide  and  Leather  Company,  having 
a  capital  stock  of  about  $32,000,000  and  22  plants  and 
controlling  about  sixty  per  cent,  of  the  industry. 

The  American  Radiator  Company,  having  an 
authorized  capital  stock  of  about  $10,000,000  and  12 
plants  and  controlling  eighty  per  cent,  of  the  industry. 

The  American  Seeding  ^^lachine  Company,  known 
as  The  Seeding  Machine  Trust,  having  an  authorized 
capital  of  $15,000,000  and  6  plants  and  controlling 
ninety  per  cent,  of  the  trade. 

The  American  Sewer  Pipe  Company,  having  an 
authorized  capital  of  $8,000,000  and  controlling  from 
forty  per  cent,  to  fifty  per  cent,  of  the  industry. 

But  without  extending  this  list,  it  is  safe  to  say  that 
there  are  but  few  large  industries  in  our  country  which 
are  not  protected  by  customs  duties  and  which  have 
not  formed  themselves  into  trusts  for  the  purpose  of 
destroying  home  competition  and  thereby  raising  the 
price  of  the  commodities  which  they  manufacture  up 
to  the  duty  line.  Does  this  vast  organized  wealth 
need  protection  ?  It  does  not  need  it,  but  it  commands 
it.  All  these  trusts  give  the  usual  reasons  for  their 
formation — the   lessening   cost    of    manufacture,    the 


80  THE   TARIFF    AND    THE    TRUSTS 

saving  of  commercial  agents,  the  division  of  territory 
between  their  plants,  and  the  reduction  of  the  price  to 
their  customers.  But  every  one  of  them  when  it  had 
established  its  control  of  the  market  not  only  kept  the 
whole  of  the  savings  of  the  consolidation  to  itself,  but 
took  from  the  public  considerable  besides,  making  the 
selling  prices  much  higher  than  they  would  have  been 
under  full  competition.  We  Americans  boast  of  our 
freedom,  and  yet  in  that  particular  branch  of  life  which 
touches  the  most  people,  the  right  to  buy  and  sell,  we 
have  been  throttled  by  the  trusts  as  no  other  people  in 
the  world  have  ever  been  throttled.  If  our  industrial 
freedom  is  taken  away,  hovv'  long  will  any  other  right 
or  liberty  be  respected?  We  look  with  pity  upon  the 
downtrodden  nations  of  Europe,  oppressed  by  royal 
tyrants  and  privileged  aristocrats,  but  where  in  all  the 
world  can  you  find  such  gigantic  combinations  formed 
for  the  purpose  of  suppressing  competition  and  fixing 
artificial  prices  as  exist  to-day  in  this  country?  The 
present  generation  of  Europeans,  to  a  considerable 
extent  has  inherited  its  industrial  restrictions  from 
conditions  existing  in  the  eighteenth  century;  but  we 
can  proudly  boast  that  we  are  a  self-made  people  and 
have  ourselves  forged  the  fetters  that  bind  us,  and  that 
we  have  forged  them  so  strong  that  it  will  be  doubtful 
whether  we  can  ever  break  them.  I  am  not  exagger- 
ating when  I  say  that  there  are  a  large  number  of  peo- 
ple in  this  country  who  have  such  an  admiration  for  big 


THE   TRUSTS  8l 

things  that  they  admire,  for  its  size,  the  very  trust  that 
robs  them  daily,  and  will  consent  to  be  fleeced  if  it 
only  be  done  by  some  institution  which  is  big.  The 
newspapers  in  glaring  headlines  daily  tell  us  of  the 
life  of  the  trust  magnate,  and  a  million  simple-minded 
folk  read  it  with  delight.  They  talk  with  each  other 
about  the  daily  and  hourly  income  of  Mr.  Rockefeller 
or  Mr.  Carnegie,  and  they  are  proud  of  these  abnormal 
growths  of  our  American  life. 

The  conditions  which  I  have  been  describing  seem 
to  me  to  lead  directly  to  state  socialism.  The  trust 
is  in  and  of  itself  a  species  of  socialism.  It  starts  in 
by  excluding  foreign  competition,  passes  on  to  the  ex- 
clusion of  home  competition,  and  ends  with  charging 
consumers  as  much  as  the  tariff  will  allow.  This  re- 
sults in  taking  men's  property  without  their  consent 
and  without  adequate  compensation,  and  that  is  social- 
ism. The  only  difference  between  the  owners  of  the 
trust  and  the  socialist  is  this :  the  owners  of  the  trust 
procure  a  law  allowing  partial  plunder  of  their  fellow- 
citizens,  while  the  socialist  proposes  to  procure  a  law 
allowing  the  taking  of  all  private  property  without 
compensation  and  the  turning  of  it  over  to  the  state 
to  be  controlled  for  the  common  benefit.  This  is  not 
partial  plunder;  it  is  universal  legalized  plunder;  but 
when  any  body  of  citizens  so  powerful  and  so  influen- 
tial as  the  men  who  procure  tariff  laws  have  started 
out  upon  a  course  of  legalized  plunder,  they  cannot 
6 


82  THE    TARIFF    AND   THE    TRUSTS 

well  Stop.  Plunder  begets  plunder,  and  they  who 
commence  with  partial  plunder  will  end  with  universal 
plunder.  You  cannot  jump  half-way  down  Niagara. 
When  the  state  farms  out  to  vast  corporations  a  part 
of  its  power  to  tax  the  people,  it  is  well  on  its  way 
toward  socialism.  A  partnership  between  trusts  and 
government  to  seize  for  the  advantage  of  the  trusts 
the  property  of  other  men  and  to  use  the  law  and 
powers  of  government  to  that  end  is  practically  social- 
ism. There  is  no  argument  in  favor  of  the  existence 
of  these  combinations  to  crush  competition,  to  limit 
production,  and  to  control  prices,  which  cannot  logical- 
ly and  consistently  be  turned  by  the  socialist  to  support 
his  doctrine.  The  socialist  argues  that  if  the  United 
States  Steel  Company  can  conduct  a  business  one- 
tenth  in  amount  of  the  industries  of  the  country  suc- 
cessfully, that  the  state  can  also  conduct  it  success- 
fully. If  the  avoidance  of  waste  resulting  from  com- 
petition is  to  outweigh  all  considerations  of  personal 
liberty  and  individual  initiative,  then  the  more  perfect- 
ly our  industries  are  organized  into  a  great  industrial 
machine  the  better.  The  socialists  perceive  this,  and 
therefore  they  do  not  attack  the  trusts.  The  social- 
ists desire  a  general  absorption  of  production  by  the 
state,  and  when  a  few  corporations  have  successfully 
absorbed  and  controlled  production,  they  say  that  the 
fruit  should  not  go  into  the  hands  of  a  few  men,  but 
should  go  into  the  hands  of  the  state  to  be  distributed 


THE   TRUSTS  83 

to  labor  as  the  true  source  of  capital.  Jean  Jaures, 
the  leader  of  French  Socialism  in  his  recent  work, 
"Studies  in  Socialism,"  says :  "And  if  capital  were 
organized,  if,  by  means  of  vast  trusts,  it  were  able  to 
regulate  production,  it  would  only  regulate  it  for  its 
own  profit.  It  would  abuse  the  power  gained  by 
union  to  impose  usurious  prices  on  the  community  of 
buyers,  and  the  working  class  would  escape  from 
economic  disorder  only  to  fall  under  the  yoke  of 
monopoly."  When  the  state  intervenes  in  behalf  of  a 
comparatively  few  men  and  provides  by  law  that  these 
shall  be  permitted  to  exact  from  the  millions  of  con- 
sumers a  price  increased  by  excessive  duties,  has  it  not 
already  taken  effective  control  of  production,  and  can 
government  under  such  circumstances  avoid  the 
socialists'  contention  that  such  a  condition  is  socialism 
without  any  benefit  to  the  people?  Again,  this  leader 
of  socialism  says :  "To  the  incomplete,  narrow  and 
chaotic  organization  of  wealth  attempted  by  capital  it 
[socialism]  has  opposed  a  magnificent  conception  of 
harmonized  wealth,  where  the  effort  of  each  would 
be  supplemented  by  the  co-ordinated  effort  of  all." 
His  idea  is  that,  instead  of  the  State's  aiding  a  few 
hundred  manufacturers  to  organize  production  into 
many  separate,  "narrow,  and  incomplete"  combina- 
tions of  capital  for  their  own  selfish  benefit,  subject- 
ing business  to  great  fluctuations  in  value,  that  it 
should  carry  out  the  "magnificent  conception  of  har- 


84  THE    TARIFF    AND   THE    TRUSTS 

monized  wealth"'  by  becoming  both  owner  and  trustee 
for  the  people  of  production.  A  fine  theory  this,  but 
the  most  dangerous  to  a  free  people  ever  promulgated 
by  mortal  man. 

Again,  is  it  not  productive  of  socialism  that  a  few 
men  have  gathered  to  themselves  a  considerable  part 
of  labor-saving  machinery  largely  for  their  own  profit 
when  these  inventions  have  resulted  from  the  progress 
of  science  and  ought  to  improve  equally  the  condition 
of  all  men?  The  law  has  protected  these  vast  cor- 
porations, first  in  their  infancy,  and  then  in  their 
power,  till  they  bid  us  defiance  and  shape  legislation 
to  their  wishes.  When  the  citizen  is  excluded  from 
taking  part  in  one  or  another  form  of  production,  to 
that  extent  he  loses  a  portion  of  the  rights  which  are 
secured  to  him  in  a  democratic  form  of  government. 
While  the  business  of  the  country  was  conducted  by 
persons  or  firms,  the  skilled  employee  held  close  and 
sympathetic  relations  with  his  employer.  He  was 
something  more  than  a  mere  machine.  He  felt  the 
stimulus  and  ambition  which  goes  with  equality  of 
opportunity.  Under  the  trust  the  employee  becomes 
part  of  a  vast  industrial  army  with  no  hopes  and  no 
aspirations,  a  daily  task  to  perform,  and  no  such  per- 
sonal interest  in  the  success  of  his  work  as  when  he 
was  in  close  contact  with  his  employer.  The  effect  of 
this  change,  together  with  the  arbitrary  methods  of 
the   trusts,    has   been    to   unite    the   laboring   men,   in 


THE   TRUSTS  85 

imitation  of  the  trusts,  into  huge  trades  unions  under 
the  leadership  of  a  few  men.  Is  not  a  condition  which 
brings  about  an  array  of  producers  strongly  organized 
into  trusts  on  the  one  side  and  the  millions  of  laboring 
men  arrayed  in  labor  unions,  under  leaders  who  are 
not  always  scrupulous,  on  the  other,  a  condition  pro- 
ductive of  evil?  The  extortions  of  the  trust  are  the 
opportunity  of  the  socialist.  Men  can  bear  poverty, 
but  not  poverty  which  they  believe  the  result  of  in- 
justice. The  trust  managers  cannot  extort  the  pen- 
nies from  the  millions  to  add  to  their  millions  and  still 
continue  to  escape  stirring  up  such  bitterness  among 
the  masses  of  the  people  that  they  are  easily  beguiled 
by  dangerous  fallacies  regarding  governnv^nt.  Our 
socialists  in  the  main  come  to  us  from  highly  pro- 
tected Germany,  where  400  cartels,  or  trusts,  export 
their  goods  and  sell  them  in  other  countries  at  lower 
prices  than  to  their  own  people.  As  a  result  of  such 
conduct  the  socialist  vote  has  doubled  within  ten 
years,  and  at  the  last  election  they  cast  3,000,000  votes. 
The  countries  in  which  socialism  best  thrives  are 
those  where  industries  are  most  highly  protected ;  and 
in  England  where  free  trade  prevails,  socialism  has 
not  obtained  a  strong  foothold. 

Many  evidences  of  socialistic  tendencies  exist  in 
this  country.  Why  have  we  been  steadily  rejecting  in 
recent  years  the  idea  of  self-help  and  looking  to  organ- 
ization, association,  and  legislation  for  all  help  to  the 


86 


THE    TARIFF    AND   THE    TRUSTS 


individual  ?  What  means  it  that  so  many  social  ques- 
tions to-day  arc  being  resolved  by  the  legislature? 
Why  are  we  attempting  to  cure  the  drink  evil  and 
social  evils,  and  all  other  kind  of  evils,  by  legislation? 
The  statute  law  to-day  is  regarded  by  the  American 
people  as  a  sovereign  specific  for  every  evil.  Why 
are  so  many  men  looking  to  the  state  as  a  universal 
employer?  Why  are  men's  faces  all  turned  to  the 
Legislature  to  regulate  labor,  grant  pensions,  and 
stimulate  industry?  Why  are  laws  volleyed  forth  like 
shot  from  a  Gatling  gun  in  every  Legislature  in  the 
country  to  protect  special  interests  and  make  people 
rich  and  happy?  Government,  in  the  eyes  of  the 
greater  part  of  the  American  people  to-day,  is  simply 
a  sort  of  a  mysterious  power  possessed  of  an  inex- 
haustible fund  of  wealth,  able  to  do  all  manner  of 
things  for  the  benefit  of  the  people,  and  the  demagogues 
thrive  upon  this  false  theory  of  government  as  pigs 
fatten  upon  corn.  The  ideas  of  the  American  people 
have  changed  radically  in  the  last  twenty  years.  We 
are  coming  to  look  upon  the  President  of  the  United 
States  as  a  kindly  monarch  whose  sole  authority  as- 
sures the  general  felicity.  We  were  once  jealous  of 
usurpation  of  power,  yet  we  sit  serenely  and  see  the 
Senate  of  the  United  States  usurp  the  power  of  the 
people's  forum,  the  House  of  Representatives.  Are 
not  all  these  evidences  that  individual  initiative,  in- 
dependence,   self-reliance,    and    manhood    among   our 


THE   TRUSTS  87 

citizens  are  giving  way  to  the  idea  that  in  some  way  we 
are  unable  to  control  our  actions  and  shape  our  own 
lives,  and  that  we  must  depend  for  guidance  upon 
government,  leaders,  and  laws,  a  socialistic  state? 

English-speaking  people  in  the  past  have  been  es- 
sentially individualists.  English  Government  in  legal 
and  social  organization  is  deeply  particularistic  and 
not  communistic.  Our  habit  of  individual  initiative 
and  of  personal  responsibility  is  a  part  of  our  birth- 
right. With  us,  according  to  English  traditions  and 
English  law,  the  individual  man  is  the  germ  of  the 
state.  He  is  to  the  state  what  the  red  corpuscles  of 
the  blood  are  to  the  human  being,  giving  life  to  the 
whole  body.  For  the  preservation  of  the  individual 
man  we  have  ever  deemed  it  necessary  to  maintain  be- 
tween men  a  fair  degree  of  equality  in  social  standing 
and  wealth,  but  the  trust  comes  in  and  creates  vast 
fortunes  and  social  inequalities.  Our  American  idea 
contemplates  that  no  industrial  power  shall  weigh 
heavily  in  the  balance  against  government,  but  the 
trusts  come  in  and  even  compel  government  itself  to 
buy  materials  for  the  building  of  the  Panama  Canal. 
It  is  of  the  highest  importance  in  sound  economy  that 
small  and  local  industries  should  not  find  themselves 
at  a  disadvantage  in  attempting  to  compete  with  great 
combinations ;  but  the  trust  comes  in  and  wages  a  war 
of  indiscriminate  suppression  of  all  small  industries. 
It  is  of  the  highest   importance  to  cultivate  in   our 


88  THE    TARIFF    AND   THE    TRUSTS 

citizens  the  habit  of  individual  initiative  by  endowing 
them  with  ownership  of  property  and  control  of  busi- 
ness ;  but  the  trust  comes  in  and  displaces  thousands 
of  independent  owners  of  business  and  takes  their  place 
with  its  huge  and  oppressive  machinery.  Government 
must  secure  justice  to  the  individual  citizen,  or  our 
form  of  government  will  lose  to  him  its  value  and  its 
charm ;  but  the  trust  steps  in  wnth  a  law  allowing  it  to 
practically  tax  the  citizen  for  its  own  private  advan- 
tage. We  cannot  live  as  a  nation  if  corruption  con- 
trols the  sources  of  legislative  action ;  but  the  trust 
comes  in  and  makes  jobbers  and  chaffers  of  many  of 
our  legislators.  And  now,  my  reader,  do  you  have 
any  doubt  that  the  creation  of  such  a  combined  and 
compacted  body  of  trusts  endowed  with  special  priv- 
ileges as  have  been  described  in  this  chapter  is  a  con- 
stant menace  to  the  continuance  of  our  free  institu- 
tions? Do  you  believe  that  we  can  preserve  liberty  to 
the  citizen  alongside  of  such  political  corruption  and 
such  industrial  slavery? 


CHAPTER  III 

AMERICAN    AND    ENGLISH    SHIPPING 

Although  we  are  the  wealthiest  country  in  the 
world,  the  greatest  producers  of  iron  and  steel,  and  the 
greatest  producers  of  coal,  possessors  of  a  sea  coast 
of  thousands  of  miles,  with  great  bays  and  gulfs  ex- 
tending into  the  interior,  and  with  every  condition 
which  ought  to  make  us  great  shipbuilders  and  car- 
riers, our  merchant  marine  for  the  last  fifty  years  has, 
in  comparison  with  other  countries,  been  little  known 
upon  the  ocean.     The  reasons  for  this  are : 

First.     Our  barbarous  navigation  laws. 

Second.  The  increased  cost  of  iron,  steel,  and  other 
materials  used  in  building  ships  because  of  the  tariff. 

Third.  The  impairment  of  our  commerce  with 
other  countries  by  reason  of  protective  tariffs  shutting 
out  imports,  and  thereby  shutting  in  exports. 

How  many  of  my  readers  know  that  there  is  in  the 
statutes  of  the  United  States  to-day  a  law  handed 
down  with  few  changes  from  the  eighteenth  century 
prohibiting  the  American  registry  of  any  ship  built  in 
a  foreign  country?  This  relic  of  the  legislation  of  a 
century  ago  comes  to  us  like  the  bones  of  some  mam- 

8q 


90  THE    TARIFF   AND   THE    TRUSTS 

moth  of  antediluvian  days,  and  its  continuance  means 
that  whenever  we  enact  a  statute  which  operates  favor- 
ably to  the  interests  of  a  few  men  or  a  single  large 
corporation,  notwithstanding  its  evil  effects  upon  the 
people,  it  is  practically  impossible  to  repeal  it.  Private 
interests  are  so  powerful  and  public  interests  are  so 
weak  that  the  following  statutes  have  remained  with 
little  change  since  the  administration  of  President 
Washington : 

Sec.  4131.  Vessels  registered  pursuant  to  law  and  no 
others,  except  such  as  shall  be  duly  qualified  according  to 
law  for  carrying  on  the  coasting  or  fishing  trade,  shall  be 
deemed  vessels  of  the  United  States,  and  entitled  to  the 
benefits  and  privileges  appertaining  to  such  vessels :  but  no 
such  vessel  shall  enjoy  such  benefits  and  privileges  longer 
than  it  shall  continue  to  be  wholly  owned  by  a  citizen  or 
citizens  of  the  United  States  or  a  corporation  created  under 
the  laws  of  any  of  the  States  thereof,  and  be  commanded  by 
a  citizen  of  the  United  States.  And  all  the  officers  of  vessels 
of  the  United  States  who  shall  have  charge  of  a  watch,  in- 
cluding pilots,  shall  in  all  cases  be  citizens  of  the  United 
States.  The  word  "officers"  shall  include  the  chief  engineer 
and  each  assistant  engineer  in  charge  of  a  watch  on  vessels 
propelled  wholly  or  in  part  by  steam ;  and  after  the  first  day 
of  January,  eighteen  hundred  and  ninety-seven,  no  person 
shall  be  qualified  to  hold  a  license  as  a  commander  or  watch 
officer  of  a  merchant  vessel  of  the  United  States  who  is  not 
a  native-born  citizen,  or  whose  naturalization  as  a  citizen 
shall  not  have  been  fully  completed. 

Sec.  4132.  Vessels  built  within  the  United  States,  and 
belonging  wholly  to  citizens  thereof,  and  vessels  which  may 
be  captured  in  war  by  citizens  of  the  United  States,  and 
lawfully  condemned  as  prize,  or  which  may  be  adjudged  to 
be  forfeited  for  a  breach  of  the  laws  of  the  United  States, 
being  wholly  owned  by  citizens,  and  no  others,  may  be  regis- 
tered as  directed  in  this  Title. 


AMERICAN    AND    ENGLISH    SHIPPING  9I 

Sec.  4135.  No  vessel  which  has  been  recorded  or  regis- 
tered as  an  American  vessel  of  the  United  States,  pursuant 
to  law,  and  which  was  licensed  or  otherwise  authorized  to 
sail  under  a  foreign  flag,  and  to  have  the  protection  of  any 
foreign  government  during  the  existence  of  the  rebellion, 
shall  be  deemed  or  registered  as  a  vessel  of  the  United 
States  or  shall  have  the  rights  and  privileges  of  vessels  of 
the  United  States,  except  under  provisions  of  law  especially 
authorizing  such  registry. 

Sec.  4136.  The  Secretary  of  the  Treasury  may  issue  a 
register  or  enrollment  for  any  vessel  built  in  a  foreign  coun- 
try, whenever  such  vessel  shall  be  wrecked  in  the  United 
States,  and  shall  be  purchased  and  repaired  by  a  citizen  of 
the  United  States,  if  it  shall  be  proved  to  the  satisfaction  of 
the  Secretary  that  the  repairs  put  upon  such  vessel  are  equal 
to  three-fourths  of  the  cost  of  the  vessel  when  so  repaired. 

Sec.  4142.  In  order  to  the  registry  of  any  vessel,  an  oath 
shall  be  taken  and  subscribed  by  the  owner,  or  by  one  of 
the  owners  thereof,  before  the  officer  authorized  to  make 
such  registry,  declaring,  according  to  the  best  of  the  knowl- 
edge and  belief  of  the  person  so  swearing,  the  name  of  such 
vessel,  her  burden,  the  place  where  she  was  built,  if  built 
within  the  United  States,  and  the  year  in  which  she  was 
built;  or  that  she  has  been  captured  in  war,  specifying  the 
time,  by  a  citizen  of  the  United  States  and  lawfully  con- 
demned as  prize,  producing  a  copy  of  the  sentence  of  con- 
demnation, authenticated  in  the  usual  forms ;  or  that  she 
has  been  adjudged  to  be  forfeited  for  a  breach  of  the  laws 
of  the  United  States,  producing  a  like  copy  of  the  adjudica- 
tion of  forfeiture;  and  declaring  his  name  and  place  of 
abode,  and  if  he  be  the  sole  owner  of  the  vessel,  that  such 
is  the  case;  or  if  there  be  another  owner,  that  there  is  such 
other  owner,  specifying  his  name  and  place  of  abode,  and 
that  he  is  a  citizen  of  the  United  States,  and  specifying  the 
proportion  belonging  to  each  owner ;  and  where  an  owner 
resides  in  a  foreign  country,  in  the  capacity  of  a  consul  of 
the  United  States,  or  as  an  agent  for  and  a  partner  in  a 
house  or  co-partnership  consisting  of  citizens  of  the  United 
States,  actually  carrying  on  trade  within  the  United   States, 


92  THE    TARIFF    AND   THE    TRUSTS 

that  such  is  the  case,  that  the  person  so  swearing  is  a  citizen 
of  the  United  States,  and  that  there  is  no  subject  or  citizen 
of  any  foreign  prince  or  state,  directly  or  indirectly,  by  way 
of  trust,  confidence,  or  otherwise,  interested  in  such  vessel, 
or  in  the  profits  or  issues  thereof;  and  that  the  master 
thereof  is  a  citizen,  naming  the  master,  and  stating  the  means 
whereby  or  manner  in  which  he  is  a  citizen. 

Sec.  4165.  A  vessel  registered  pursuant  to  law,  which  by 
sale  has  become  the  property  of  a  foreigner,  shall  be  entitled 
to  a  new  register  upon  afterwards  becoming  American 
property,  unless  it  has  been  enlarged  or  undergone  change  in 
build  outside  of  the  United  States. 

Sec.  4330.  No  license  or  enrollment  and  license,  nor  re- 
newal of  either,  shall  hereafter  be  issued  to  any  vessel  until 
the  collector  to  whom  application  is  made  for  the  same  is 
satisfied,  from  the  oath  of  the  owner  or  master,  that  all 
equipments  and  repairs  made  in  a  foreign  port  within  the 
year  immediately  preceding  such  application  have  been  duly 
accounted  for,  and  the  duties  accruing  thereon  duly  paid : 
and  if  such  owner  or  master  shall  refuse  to  take  such  oath, 
or  take  it  falsely,  the  vessel  shall  be  seized  and   forfeited. 

Act  May  id,  1892. 

An  Act  to  Encourage  American  Shipbuilding.  (27  Stat. 
27).  Registry  of  foreign-built  vessels  owned  in  part  by 
citizens ;  conditions. 

Be  it  enacted,  &c..  That  the  Secretary  of  the  Treasury  is 
hereby  authorized  and  directed  to  grant  registers,  as  vessels 
of  the  United  States,  to  such  foreign-built  steamships  now 
engaged  in  freight  and  passenger  business,  and  sailing  in  an 
established  line  from  a  port  in  the  United  States,  as  are  of  a 
tonnage  of  not  less  than  eight  thousand  tons,  and  capable  of 
a  speed  of  not  less  than  twenty  knots  per  hour,  according 
to  the  existing  method  of  Government  test  for  speed,  of 
which  not  less  than  ninety  per  centum  of  the  shares  of  the 
capital  of  the  foreign  corporation  or  association  owning  the 
same  was  owned  January  first,  eighteen  hundred  and  ninety, 
and  has  continued  to  be  owned  until  the  passage  of  this  act 
by  citizens  of  the  United  States,  including  as  such  citizens  cor- 


AMERICAN    AND    ENGLISH    SHIPPING  93 

porations  created  under  the  laws  of  any  of  the  States  thereof, 
upon  the  American  owners  of  such  majority  interest  obtain- 
ing a  full  and  complete  transfer  and  title  to  such  steamships 
from  the  foreign  corporations  owning  the  same :  Provided, 
That  such  American  owners  shall,  subsequent  to  the  date  of 
this  law,  have  built,  or  have  contracted  to  build,  in  American 
shipyards,  steamships  of  an  aggregate  tonnage  of  not  less  in 
amount  than  that  of  the  steamships  so  admitted  to  registry. 
Each  steamship  so  built  or  contracted  for  to  be  of  a  tonnage 
of  not  less  than  seven  thousand  tons. 

These  statutes,  amended  only  by  the  Statute  of  1892, 
have  survived  the  wreck  of  time,  the  wreck  of  our 
merchant  luarine,  and  still  remain  as  a  striking  evi- 
dence of  the  incapacity  of  the  American  Congress. 
Similar  statutes  existed  in  the  eighteenth  century  in 
most  European  countries ;  but,  while  they  have  re- 
pealed the  provisions  as  to  registering  foreign  ships,  we 
have  allowed  it  to  continue  except  as  modified  by  the 
last  section  above.  A  foreigner  may  invest  in  any 
industry  in  this  country,  but  if  he  has  an  interest  to 
the  amount  of  one  dollar  in  a  ship,  it  cannot  be  regis- 
tered here.  We  can  buy  a  locomotive  or  any  other 
kind  of  merchandise  in  Europe  if  we  are  willing  to  pay 
the  duty,  but  no  x\merican  can  buy  a  ship  and  sail  it 
under  our  flag.  The  result  is  that  our  citizens  are 
buying  of  British  owners  "tramp"  ships  and  sailing 
them  under  the  English  flag.  This  barbarous  law  is 
kept  upon  the  statute-book  largely  for  the  benefit  of 
William  Cramp  &  Sons,  of  Philadelphia,  the  largest 
shipbuilding  firm  in  the  country.     Mr.  C.  H.  Cramp, 


94  THE    TARIFF    AND   THE    TRUSTS 

the  head  of  that  firm,  testified  before  the  Industrial 
Commission  as  follows:  "There  is  money  now  in  run- 
ning ships,  and  there  are  a  lot  of  Americans  who  are 
buying  the  worst  kind  of  ships — British  'bum'  ships 
(I  use  that  word  because  the  word  'tramp'  is  not 
strong  enough),  the  worst  ships  the  English  have  got 
to  sell.  They  are  bought  by  Americans,  and  these 
people  are  now  denouncing  the  Subsidy  Bill  because 
these  'bum'  ships  of  theirs  don't  get  much  of  it." 

O.  That  is  the  case  of  American  money  being  in- 
vested under  the  British  flag  not  having  a  majority  of 
the  stock? 

A.  Well,  many  are  buying  ships  already  built,  the 
"tail-enders."  The  ships  that  are  being  built  to-day 
abroad  are  vastly  larger  than  those  built  a  few  years 
ago.  There  has  been  tremendous  augmentation  in  the 
dimensions  of  ships.  The  consequence  is  that  British 
ship-owners  who  own  thirty,  forty,  fifty  or  one  hun- 
dred are  selling  off  the  "tail-enders"  and  adding  large 
ships  to  the  top.  Now,  these  ships  on  the  "tail-end" 
are  sold  off  at  bargains.  There  are  a  great  many 
American  bargain-hunters,  and  a  great  many  are  doing 
that  thing  now. 

Q.  These  ships  are  not  admitted  to  United  States 
registry  are  they  ? 

A.  No ;  but  they  expect  if  they  kill  the  Subsidy 
Bill,  they  will  get  them  in  somehow.  They  think  by 
the  destruction  of  everything  in  sight  American  they 
will  come  out  on  top  ultimately. 


AMERICAN    AND    ENGLISH    SHIPPING  95 

If  the  following  history  does  not  show  that  about 
everything  American  in  shipbuilding  has  been  destroyed 
by  legislation  for  the  benefit  of  such  men  as  Mr. 
Cramp,  then  facts  have  no  value.  These  moss-grown 
navigation  acts  come  from  a  time  when  piracy  was  al- 
most a  recognized  trade,  and  if,  through  piracy,  an 
American  had  captured  a  foreign  ship,  he  probably 
could  have  procured  its  registry  under  these  la\ys. 
But  if  to-day  an  American  citizen  attempts  to  exercise 
the  natural  right  of  a  free  man  to  buy  a  ship  when  and 
where  it  seems  best,  he  can  not  sail  it  under  his  coun- 
try's flag.  If  a  foreign  vessel  is  wrecked  upon  our 
coast  and  the  wreck  bought  by  a  citizen,  he  can  use  it 
for  wood,  but  he  cannot  register  or  enroll  it  unless 
he  is  able  to  testify  that  the  repairs  which  he  has  put 
upon  it  are  equal  to  three-fourths  of  the  cost  of  the 
vessel  when  so  repaired. 

Years  ago  President  Cleveland  said  of  these  statutes 
which  I  have  cited :  "The  ancient  provision  of  our  law 
denying  American  registry  to  ships  built  abroad  and 
owned  by  Americans  appears,  in  the  light  of  present 
conditions,  not  only  to  be  a  failure  for  good  at  every 
point,  but  to  be  nearer  a  relic  of  barbarism  than  any- 
thing that  exists  under  the  permission  of  a  statute  of 
the  United  States.  I  earnestly  recommend  its  prompt 
repeal."  And  still  this  relic  of  barbarism  lingers,  and 
we  are  deprived  of  our  Yankee  birthright  to  "swap" 
our  money  for  ships.     We  can  sell  our  ships  to  Eng- 


96  THE    TARIFF    AXD    THE    TRUSTS 

land,  for  she  buys  them  from  any  country  where  she 
can  get  them  cheaper  than  she  can  make  them,  but  we 
cannot  buy  a  ship  of  her  or  of  any  other  country.  Of 
this  condition  an  eminent  Scotch  shipbuilder  has  said : 
"It  is  a  matter  of  regret  to  us  that  there  is  likely  to 
be  a  change  in  the  American  registry  laws.  For  the 
last  thirty  years  they  have  permitted  us  to  build,  and 
largely  to  own,  nearly  all  the  ships  that  the  ocean-car- 
rying trade  requires ;  and  they  have  caused  a  loss  to 
their  people  of  about  £40.000,000  annually  of  freight 
money  that  they  might  have  appropriated  to  them- 
selves. Their  new  policy  of  free  ships,  if  adopted 
now',  would  unquestionably  benefit  our  shipyards  for 
one  or  two  years ;  but  the  competition  to  which  Amer- 
ican shipwrights  would  be  forced  would  soon  enable 
them  to  divide  with  us  the  shipbuilding,  and  their 
countrymen  to  divide  with  us  the  ship-owning  of  the 
world,  in  both  of  which  industries  they  have  hereto- 
fore so  kindly  given  us  the  practical  monopoly." 

In  view  of  the  fact  that  the  New  England  shipbuild- 
ing industries  in  the  main  have  long  since  passed  away 
as  a  result  of  this  navigation  act  and  of  protective 
tariffs,  it  may  be  of  interest  to  see  the  part  which  New 
England  played  in  bringing  about  this  condition.  In 
the  Convention  framing  the  Federal  Constitution,  two 
questions  agitated  New  England  and  the  South,  the 
questions  of  slavery  and  the  regulation  of  commerce. 
The    Southern   people,   who   were    at   that    time    free 


AMERICAN    AND    ENGLISH    SHIPPING  97 

traders,  desired  slavery  and  the  legalization  of  the 
slave  trade.  New  England,  having  at  that  time  large 
shipbuilding  interests,  wished  the  national  government 
to  regulate  commerce  and  to  pass  a  navigation  act  for 
the  protection  of  its  shipbuilding  interests.  The  dis- 
cussions in  the  Convention  resulted  in  the  selectioh  of 
a  committee  made  up  of  Southern  and  New  England 
members,  and  in  a  compromise  by  which  New  Eng- 
land got  her  navigation  act  in  return  for  her  consent 
to  the  continuation  of  the  slave  trade,  the  New  Eng- 
land members  consenting  to  the  clause  afterwards 
made  a  part  of  the  Constitution,  that  the  slave  trade 
might  be  continued  until  1808,  and  the  Southern  men 
in  return  agreeing  that  the  National  Government 
might  be  given  the  power  to  regulate  commerce.  To- 
day the  shipbuilding  of  New  England  has  gone,  com- 
paratively few  men  are  engaged  in  the  sailing  of  her 
ships,  she  is  without  coal  or  iron  for  her  factories,  and 
is  pleading  with  the  nation  to  remove  the  protective 
tarifif  upon  coal,  hides,  lumber,  iron  and  other  products 
which  she  can  buy  more  cheaply  of  Quebec,  New 
Brunswick  and   Nova   Scotia. 

The  second  reason  for  the  decadence  of  our 
merchant  marine  is  the  increased  cost  of  ships  because 
of  our  protective  tariff.  The  steel  which  the  English 
shipbuilders  use  in  the  making  of  their  best  ships  is 
made  from  ore  produced  in  Spain  and  Sweden.  The 
brass  for  her  ships  comes  from  Spanish  and  American 
7 


98  THE   TARIFF    AND    THE    TRUSTS 

copper,  the  zinc  from  Germany,  the  wood-work  from 
America  or  Norway,  the  ropes  from  Russia,  and  the 
hemp  from  the  PhiHppines,  and  these  are  all  admitted 
free  of  duty.  The  cost  of  the  same  material  entering 
into  American  ships  is  about  forty  per  cent,  greater 
than  the  cost  of  the  products  used  by  English  ship- 
builders by  reason  of  the  increased  price  which  the 
steel  trust  and  the  other  trusts  are  able  to  exact 
through  the  tariff  and  the  trust  for  their  materials. 
It  is  true  that  there  is  a  provision  in  the  Dingley  Bill 
that  all  materials  of  foreign  production  which  may  be 
necessary  for  the  construction  of  vessels  built  in  the 
United  States  for  foreign  account  and  ownership,  or 
for  the  purpose  of  being  employed  in  the  foreign  trade, 
may  be  imported  in  bond  under  such  regulations  as 
the  Secretary  of  the  Treasury  may  prescribe,  and  up- 
on proof  that  such  materials  have  been  used  for  such 
purposes  no  duty  shall  be  paid  thereon.  The  statute 
however  has  a  provision  which  practically  nullifies  its 
beneficial  effect,  for  it  provides:  "But  vessels  receiv- 
ing the  benefit  of  this  section  shall  not  be  allowed  to 
engage  in  the  coastwise  trade  of  the  United  States 
more  than  two  months  in  any  one  year,  except  upon 
the  payment  to  the  United  States  of  the  duties  of 
which  a  rebate  is  herein  allowed.  Provided,  that  ves- 
sels built  in  the  United  States  for  foreign  account  and 
ownership  shall  not  be  allowed  to  engage  in  the  coast- 
wise   trade    of   the    United    States."     But    American 


AMERICAN    AND    ENGLISH    SHIPPING  99 

ship-owners  do  not  build  deep-sea  ships,  though  in- 
tended for  use  in  foreign  commerce,  without  consid- 
ering that  some  day  they  will  be  able  to  fall  back  on 
the  coastwise  trade  which  is  now  extended  to  Hawaii 
and  Porto  Rico,  and  will  soon  include  the  Phillippines ; 
so  that  this  provision  of  the  statute  has  been  availed 
of  for  the  complete  construction  of  but  one  large 
steel  ship,  the  Dirigo,  built  by  Arthur  Sewall  &  Co. 
at  Bath,   Maine. 

The  builders  of  ships  who  appeared  before  the 
United  States  Commission  of  Mercantile  Marine  in 
1904  claimed  that  the  increased  cost  of  materials  for 
shipbuilding  was  one  of  the  chief  reasons  for  invok- 
ing subsidies  for  American  shipping.  Mr.  Orlott, 
President  of  the  Newport  News  Shipbuilding  and 
Drydock  Company,  when  a  witness  before  the  United 
States  Commission,  said :  "There  is  a  difference  of 
about  forty  per  cent,  [in  the  cost  of  shipbuilding]  on 
account  of  the  tariff.  .  .  .  Because  everything  in  the 
way  of  material  entering  into  the  construction  of  a 
ship  is  highly  protected  here.  It  is  not  only  the  steel 
that  forms  the  hollow  of  the  vessel  that  is  affected  in 
price;  it  is  every  conceivable  item  that  goes  into  a 
ship."  In  the  Monthly  Summary  of  Commerce  and 
Finance  of  the  United  States  for  August,  1900,  pre- 
pared by  the  Bureau  of  Statistics  of  the  United  States 
Treasury,  the  statement  is  made  that  "the  progress  of 
work  on  shipbuilding  in  the  United  States  has  largely 


lOO  THE   TARIFF   AND   THE   TRUSTS 

been  retarded  because  makers  of  steel  materials  re- 
quire a  higher  price  from  the  American  consumers  than 
they  do  from  foreign  consumers  for  substantially 
similar  products."  And  this  government  official  sug- 
gests as  a  remedy  "a.  reduction  of  the  tariff  on  un- 
finished iron  and  steel,"  in  order  to  equalize  the  oppor- 
tunities of  our  shipbuilders  with  those  of  the  builders 
of  ships  in  foreign  countries. 

But  one  of  the  most  substantial  reasons  for  the 
decadence  of  our  shipping  is  the  decrease  of  commerce 
with  other  countries  which  results  naturally  from  our 
protective  tariff.  We  read  in  foreign  newspapers 
about  the  American  peril,  the  dumping  of  our  manu- 
factured products  upon  European  countries,  and  one 
would  think  from  these  statements  that  we  had  be- 
come the  greatest  exporting  nation  of  manufactured 
products  in  the  world.  Our  people  are  capable  of 
becoming  the  greatest  exporters  of  manufactured 
products,  and  but  for  the  restrictions  upon  our  com- 
merce by  the  tariff  we  would  have  long  since  attained 
that  position  among  the  nations,  but  we  are  far  from 
being  such  to-day.  In  the  year  1903  we  exported  of 
what  are  designated  as  manufactured  articles  only 
$421,453,915.  In  the  same  year  Great  Britain  ex- 
ported of  manufactured  products  about  $1,200,000,000. 
Of  that  $421,453,915  which  we  exported  in  1903, 
$109,356,177  were  copper  and  mineral  oils,  which 
hardly   can  be    regarded   as   manufactured   products, 


AMERICAN    AND   ENGLISH    SHIPPING  lOI 

while  the  manufactured  products  exported  from 
Great  Britain  were  what  are  known  as  highly  manu- 
factured products.  So  the  reader  will  see  that,  in- 
cluding in  our  exports  copper  and  oil  as  manufactured 
products,  Great  Britain's  exports  of  manufactured 
products,  when  her  population  of  forty  million  is  com- 
pared with  ours  of  eighty  million,  are  more  than  five 
times  as  much  for  every  man,  woman  and  child  in  that 
country ;  that  is,  one  Englishman  makes  for  export 
more  than  five  times  as  much  as  one  American  The 
exports  of  Great  Britain  of  manufacilired  p^rcducts  in 
the  year  1902  were  about  the  amount  of  the  exports 
of  manufactured  products  from  both  Germany  and 
France  combined.  Our  farmers  are  our  exporters, 
and  the  reason  why  our  manufacturers  export  so  little 
is  that  we  import  comparatively  so  little.  You  can- 
not sell  abroad  unless  you  buy  abroad,  because  ex- 
porting is  merely  exchanging  the  commodities  of  your 
own  laborers  for  the  commodities  made  by  the  labor- 
ers of  other  countries.  In  the  first  instance  and  in  the 
last  instance  commerce  is  nothing  but  exchange,  and 
the  balance  of  trade  indicates  little  or  nothing  as  to 
the  real  transaction,  which  is  essentially  a  transaction 
of  give  and  take,  of  goods  for  goods.  Never  was  the 
principle  more  tersely  and  correctly  stated  than  by  a 
Massachusetts  member  of  the  House  of  Representa- 
tives in  1790  which  enacted  what  is  known  as  the 
Hamilton  Tariff.     That  tariff  imposed  a  duty   upon 


102 


THE   TARIFF   AND   THE   TRUSTS 


molasses,  and  when  it  was  being  discussed  before 
the  House  of  Representatives,  this  member  from  Mas- 
sachusetts arose  and  said:  "We  up  in  Massachusetts 
do  not  want  that  duty  upon  molasses,  we  trade  our 
fish  for  molasses,  and  if  you  shut  out  molasses  you 
shut  in  fish."  Mr.  H.  Russell  Rea,  a  member  of  the 
House  of  Commons  in  England,  recently  produced  be- 
fore the  Commons  a  carefully  prepared  table  showing 
the  relations  between  the  tariffs  of  a  country  and  the 
amount  of  its  steu-n' shipping  tonnage  which,  more 
forcibly  than  anything  that  I  can  say,  will  show  that 
restri<:tions  upon  traide  in  the  nature  of  protective 
tariffs  destroy  commerce  between  nations,  and  there- 
fore the  shipbuilding  industry.  The  average  ad 
valorem  import  duty  to  the  United  States  by  this 
table  is  j},  per  cent.,  but  that  is  the  average  ad  valorem 
duty  upon  dutiable  manufactured  products  exported 
from  England  to  the  United  States,  and  with  that 
correction  I  submit  this  table  as  tending  strongly  to 
prove  my  contention : 


Average  ad  valorem 
import  duties 

Russia     131 

United     States     73 

Austria-Hungary     35 

France     34 

Italy     27 

Germany     25 

Sweden     23 

Greece     19 

Denmark     18 

Norway     12 

Holland      3 

United   Kingdom.     No   Protec- 
tionist  tariff 


Steam   Shipping 
tonnage  per  inhabitant 
Russia     I  ton  to  every  330 


United     States           ' 

166 

Austria-Hungary 

'            no 

France     

71 

Italy     

T2 

Germany     .... 

34 

Sweden     

24 

Greece     

'               12 

Denmark     .... 

9 

Norway     

4 

Holland     

15 

United   Kingdom 

4.6 

AMERICAN    AND    ENGLISH    SHIPPING  IO3 

Now  let  US  examine  the  causes  of  the  navigation 
acts,  the  condition  of  American  shipping  in  the  colon- 
ial and  early  history  of  the  country  and  its  present 
condition.  During  colonial  days,  a  long  series  of 
protective  statutes  intended  to  destroy  American  ship- 
ping were  passed  by  the  English  Parliament,  but  they 
availed  little  or  nothing.  It  seemed  that  some  way 
the  colonists  were  born  to  the  sea,  for  they  built  ships 
and  sailed  ships  and  sold  ships  and  the  materials  for 
ships  to  England,  and  a  ship  could  be  built  in  those 
times  in  America  with  high-priced  labor  cheaper  than 
anywhere  else  in  the  world.  In  the  year  1779  alone, 
we  built  389  vessels.  In  1789,  when  we  began  regis- 
tering our  tonnage,  we  had  123,893  registered  tons 
engaged  in  foreign  trade  and  77,669  tons  engaged  in 
domestic  trade,  a  high  percentage  of  the  tonnage  of 
the  civilized  world  at  that  time.  Prior  to  the  treaty 
of  1783,  ending  the  Revolutionary  War,  the  American 
colonies  had  been  permitted  to  trade  with  the  other 
British  possessions  in  America ;  but  that  privilege  was 
not  continued  by  the  treaty.  Soon  after  that  treaty  a 
terrible  hurricane  occurred  in  the  West  Indies,  destroy- 
ing all  the  crops  and  leaving  tens  of  thousands  of  peo- 
ple in  a  starving  condition,  and  because  of  England's 
Navigation  Act  and  our  consequent  inability  to  reach 
these  people  with  food,  fifteen  thousand  slaves  were 
known  to  have  died  in  a  short  time  from  starvation. 
But,  notwithstanding  England's  Navigation  Act  and 


104  THE   TARIFF   AND   THE    TRUSTS 

her  cutting  us  off  from  trade  with  her  colonies,  the 
building  of  ships  and  the  sailing  of  ships  went  on. 
When  John  Adams  became  the  first  representative  of 
the  United  States  at  the  British  Court  he  sought  to 
convince  Lord  Carmarthen,  the  foreign  secretary,  of 
the  desirableness  of  both  countries  repealing  their 
navigation  acts,  but  with  no  success.  England  made 
her  ships  at  home,  instead  of  buying  them  of  Amer- 
ica, and  made  them  of  inferior  workmanship  and  at  a 
higher  cost.  Thirty  years  after,  in  the  war  of  1812, 
she  gathered  the  fruits  of  her  narrow  policy,  and  saw 
frigate  after  frigate  outsailed  and  defeated  in  single 
combat  with  American  antagonists.  The  provision 
forbidding  our  purchase  of  foreign  ships  affected  our 
own  shipping  interests  but  little,  since  we  could  then 
build  wooden  ships  cheaper  than  any  other  people  in 
the  world  and  the  duties  upon  materials  going  into 
ships  under  the  Hamilton  Tariff'  were  very  low.  By 
181 5  the  tonnage  engaged  in  foreign  trade  was  438,863 
tons.  In  1840  England  did  away  with  the  provisions 
prohibiting  us  from  trading  with  her  American 
colonies,  and  in  1849  she  repealed  all  of  her  restrict- 
ive navigation  laws,  from  that  time  on  there  being  no 
restriction  against  us  in  any  part  of  her  domain.  Our 
building  of  ships  went  on  with  great  rapidity.  Many 
centers  of  shipbuilding  grew  up  in  this  period  in  New 
England.  The  clink  of  the  shipman's  hammer  sound- 
ed all  along  her  coast.     The  beautiful  spectacle  of  the 


AMERICAN    AND    ENGLISH    SHIPPING  10$ 

launching  of  the  ship  was  a  common  one.  Those  were 
the  days  of  the  cHppers  and  hners,  the  Great  RepubHc, 
the  Defender  and  the  Sovereign  of  the  Seas.  Mr. 
Gladstone,  in  1881,  speaks  of  seeing  in  his  earlier 
days  the  beautiful  American  liners  and  packets  be- 
tween New  York  and  Liverpool,  which,  he  says,  car- 
ried the  pick  of  the  trade  between  the  two  countries. 
Of  our  position  in  shipbuilding  he  says :  "The  Amer- 
icans were  deemed  to  be  entirely  superior  to  us  in 
shipbuilding  and  navigation ;  they  had  four-fifths  of 
the  whole  trade  between  the  two  countries  in  their 
hands ;  and  that  four-fifths  was  the  best  of  the  trade, 
and  but  the  dregs  were  left."  In  1861  our  total  ton- 
nage, both  domestic  and  oversea,  was  5,539,813,  only 
about  350,000  tons  short  of  that  of  the  whole  British 
Empire  at  that  time.  In  1861  we  actually  owned 
about  one-third  of  the  entire  tonnage  of  the  world. 
In  the  year  1855  we  built  2,027  vessels  of  583,450  tons 
burden.  For  the  year  ending  June  30,  1856,  the  total 
value  of  our  imports  and  exports  carried  in  American 
vessels  was  $482,268,274,  while  the  amount  carried  in 
foreign  vessels  was  $159,336,576.  By  1869  our  flag 
had  almost  departed  from  the  ocean,  and  a  Congres- 
sional investigation  was  instituted  to  find  out  the  cause 
of  the  decadence  of  American  shipping.  Before  the 
committee  came  members  of  the  New  York  Ship- 
owners' Association,  and  they  unanimously  agreed 
that  the  cause  was  that  ships  were  now  being  built 


I06  THE    TARIFF    AND   THE   TRUSTS 

from  iron  and  not  from  wood,  that  the  price  of  iron 
and  steel  and  the  materials  in  a  ship  were  so  high  that 
our  ship-owners  could  not  produce  them  as  cheaply  as 
they  could  buy  them,  and  that  the  Navigation  Act  for- 
bidding the  registry  of  a  ship  built  in  other  countries 
and  purchased  by  Americans  should  be  repealed.  But 
Congress  seemed  to  think  that  it  was  better  to  pro- 
tect one  American  shipping  firm  than  to  have  hundreds 
of  vessels  flying  our  flag  and  plying  between  our  ports 
and  those  of  other  countries.  In  1816  Daniel  Webster 
said:  "How,  sir,  do  ship-owners  and  navigators  ac- 
complish this?  How  is  it  that  they  are  able  to  meet 
and  in  some  measure  to  overcome  universal  competi- 
tion? Not,  sir,  by  protection  and  bounties,  but  by  un- 
wearied exertion,  by  extreme  economy,  by  unshaken 
perseverance,  by  that  manly  and  resolute  spirit  which 
relies  on  itself  to  protect  itself."  All  such  kind  of 
advice  has  passed  away,  and  the  hardy  race  of  seamen 
has  gone  with  it.  No  call  from  the  sea  sounds  for 
America.  Seldom  is  our  flag  seen  upon  it.  But  we 
are  a  great  country,  for  we  have  our  Cramps  and  their 
shipyards. 

But  Mr.  Cramp  has  made  some  return  for  the  favors 
of  Congress.  In  1870  the  Cramp  Company  built  four 
steamships  known  as  the  Indiana,  Illinois,  Pennsyl- 
vania, and  Ohio,  for  the  American  Steamship  Com- 
pany. Let  me  give  to  the  reader  an  extract  from  Mr. 
Cramp's  testimony  before  the  Industrial  Commission 


AMERICAN    AND    ENGLISH    SHIPPING  10/ 

in  December,  1900,  about  the  building  of  these  steam- 
'ers  and  their  history.  It  will  well  show  the  depths  to 
which  our  oversea  shipping  had  fallen.  He  said : 
"There  were  at  that  time  indications  that  the  policy  of 
the  general  government  toward  the  national  merchant 
marine  would  be  liberal,  and  it  is  probable  that  these 
indications  had  some  bearing  upon  the  action  of  the 
American  Steamship  Company ;  but  if  so,  the  policy 
was  altered  too  soon  to  realize  any  benefit,  and  its  sub- 
sequent career  presented  the  aspect  of  an  unequal  and 
of  course  unsuccessful  contest  between  an  unaided 
private  American  enterprise  and  British  competitors 
backed  by  all  the  resources  of  their  powerful  govern- 
ment. .  .  .  Suffice  to  say  that  for  more  than  two  dec- 
ades before  1893  they  (the  Indiana,  Illinois,  Pennsyl- 
vania, and  Ohio)  have  had  the  melancholy  distinction 
of  being  the  only  merchant  steamships  to  show  the 
stars  and  stripes  regularly  in  the  ports  of  western 
Europe,  and  in  the  three  hundred  and  odd  passages 
that  each  of  them  has  made,  their  performance  has  in- 
variably been  excellent.  At  any  rate,  though  over- 
shadowed in  size  and  distanced  in  speed  by  later 
products  of  the  fierce  competition  which  has  followed 
their  advent  the  four  American  ships  have  served  to 
tide  the  name  of  the  American  merchant  marine  over 
a  score  of  weary  and  disheartening  years ;  and  now, 
in  the  days  of  a  brighter  epoch,  they  remain  sturdy 
links  connecting  the  promise  of  the  future  with  the 


I08  THE   TARIFF   AND  THE   TRUSTS 

glories  of  the  past.  It  has  been  no  easy  errand  to  keep 
the  American  flag  fluttering  upon  a  North  Atlantic 
steamship  since  1872 ;  but  these  four  ships  have  done 
it,  etc."  Are  there  any  greater  pessimists  than  the 
men  who  maintain  their  shipyards  by  government  aid, 
always  urging  their  fears  of  competition  as  the  reason 
for  giving  them  such  laws  as  they  desire?  Is  this 
the  kind  of  spirit  from  which  we  may  expect  the  de- 
velopment of  our  country?  The  men  who  established 
American  liberty  and  developed  American  civilization 
were  men  who  did  not  fear  to  grapple  with  fate  un- 
aided, who  asked  no  odds  but  a  free  chance  and  a  fair 
show. 

Now,  let  us  see  what  this  policy  of  restriction  has 
brought  upon  our  country.  In  i860  we  had  60,000 
gallant  sailors,  and  they  used  to  beat  the  sea.  Our 
flag  was  in  every  port  of  the  globe.  We  carried  the 
greater  part  of  our  exports  and  imports  in  American 
vessels  under  the  American  flag.  The  tonnage  of 
vessels  engaged  in  the  foreign  trade  of  the  United 
States  in  1855  was  2,348,358  tons.  In  1875  it  was 
1,515,598  tons;  in  1895,  822,347  tons;  and  in  1905, 
943,750  tons.  Mr.  Meikle,  secretary  of  the  Seattle 
Chamber  of  Commerce,  produced  before  the  United 
States  Commission  on  the  Mercantile  Marine  in  1904 
a  statistical  table  showing  that,  while  in  1821  the  per- 
centage of  the  import  and  export  trade  of  the  United 
States  carried  in  American  bottoms  was  88.7  per  cent., 


AMERICAN   AND   ENGLISH    SHIPPING  IO9 

it  had  fallen  in  1900  to  9.2  per  cent.,  at  which  figure  it 
remained  at  that  time.  During  the  year  1904  not  a 
single  oversea  merchant  steamer  was  launched  from 
American  yards. 

And  what  remedy  do  the  shipbuilders  offer  for  this 
condition  ?  They  infest  the  lobbies  of  the  capital  beg- 
ging Congressmen  for  bounties  and  subsidies  in  order 
to  balance  the  "pauper  labor"  of  England  and  make  up 
for  tariff  extortions.  They  will  not  relinquish  one 
privilege  under  the  old  navigation  act,  and  they  insist 
on  its  being  continued,  notwithstanding  the  fact  that 
all  the  other  nations  of  the  civilized  world  have  done 
away  with  this  barbarous  provision,  even  Japan  and 
China  having  repealed  their  navigation  acts,  not  only 
for  their  foreign,  but  also  for  their  coastwise  trades. 
Alone  in  all  the  world  we  stand,  hanging  to  our  old 
navigation  laws  enacted  about  115  years  ago.  The 
only  remedy  by  which  politicians  and  ship-owners  pro- 
pose to  restore  our  flag  to  the  sea  is,  first,  to  cut  off 
foreign  trade  by  protective  tariffs  and  then  impose 
taxes  on  the  farmer,  the  merchant,  and  the  consumer 
to  raise  money  for  subsidies  to  pay  to  the  shipbuilder. 
Tax  the  people  once  for  tariff,  make  them  pay  an  in- 
creased price  for  the  necessaries  of  life  to  sustain  our 
manufacturers,  and  then  turn  around  and  tax  them  all 
over  again  to  make  up  for  the  burdens  imposed  by  the 
first  tax  upon  shipbuilders.  This  equalizes  matters 
beautifully.     Commerce  upon  the  seas  is  the  handmaid 


1  lO  THE   TARIFF    AND  THE    TRUSTS 

of  liberty.  If  we  would  preserve  our  liberties,  let  us 
remove  the  shackles  which  this  old  Navigation  Act 
and  a  protective  tariff  have  put  upon  our  commerce, 
and  breed  a  new  race  of  sailors  as  hardy  and  as  skill- 
ful as  the  old. 

Now  let  us  look  at  the  picture  of  what  free  trade 
and  free  ships  have  done  for  Great  Britain.  At  the 
time  of  the  treaty  of  peace  between  the  American  Fed- 
eration and  England  in  1783  England  had  a  Naviga- 
tion Act  quite  as  barbaric  as  our  own  to-day.  In  the 
colonial  times,  as  stated  above,  our  vessels  were  per- 
mitted to  trade  with  the  other  colonies  of  Great  Brit- 
ain in  America;  but  in  the  treaty  of  1783  she  would 
not  recognize  that  right,  nor  would  the  English  Gov- 
ernment upon  the  urgent  request  of  Mr.  Adams,  our 
first  Minister,  mitigate  in  the  slightest  the  rigor  of 
her  Navigation  Act  in  return  for  more  liberal  laws  up- 
on our  part.  Bitterness  between  the  countries  arose 
from  the  attitude  of  Great  Britain,  and  probably  our 
Navigation  Act,  passed  in  Washington's  administra- 
tion, was  largely  the  result  of  that  feeling.  Our  Nav- 
igation Act  was  modified  toward  greater  severity  in 
1 816,  immediately  after  the  war  of  181 2  had  termi- 
nated, and  while  the  bitter  feelings  aroused  by  that  war 
were  still  fresh.  The  age  of  iron  ships,  however,  had 
not  yet  apperaed.  A  ship  built  from  oak  or  cedar 
could  be  built  in  those  days  at  Gloucester  or  Salem 
much  cheaper  than  it  could  be  built  in  England  from 


AMERICAN    AND    ENGLISH    SHIPPING  III 

wood  procured  along  the  Baltic.  In  1815  the  Napole- 
onic war,  which  had  made  American  bottoms  the  only 
safe  ones,  was  ended;  and  from  1815  on  till  the  break- 
ing out  of  the  Civil  War  the  struggle  between  the  Unit- 
ed States  and  England  for  supremacy  on  the  sea  con- 
tinued. The  tide  in  favor  of  England  turned  with 
her  repeal  of  the  Navigation  Acts  in  1849  ^"d  the  in- 
troduction of  iron  ships.  This  repeal  was  opposed  by 
shipbuilders,  who  declared  that  it  would  result  in  the 
ruin  of  the  merchants,  that  the  shipyards  would  be- 
come grass-grown,  that  the  British  flag  would  depart 
from  the  sea,  and  that  every  evil  conceivable  would 
result  from  the  repeal  of  these  antiquated  laws ;  but, 
in  spite  of  these  protestations,  it  was  repealed  in  the 
same  year  that  the  repeal  of  the  Corn  Laws  took  effect. 
As  stated  above,  the  repeal  of  the  Navigation  Act  al- 
lowed our  steamers  to  engage  in  the  coastwise  trade  of 
Great  Britain  and  of  all  of  her  colonies,  and  ever  since 
an  American  ship  has  had  every  right  in  every  port  of 
Great  Britain  and  of  all  of  her  colonies  which  her  own 
ships  have  had.  Soon  after  the  repeal  of  the  Navi- 
gation Acts  came  the  building  of  iron  ships,  and  with 
the  building  of  iron  ships  the  prosperity  of  English 
shipping  increased  more  rapidly  than  that  of  Amer- 
ican shipping,  because  England  admitted  free  of  duty 
the  steel,  brass,  zinc,  ropes,  hemp,  and  everything  that 
went  into  the  making  of  a  ship,  while  even  under  the 
Walker  Tariff  in  this  country  there   were  moderate 


112  THE   TARIFF   AND   THE    TRUSTS 

duties  Upon  these  articles.  The  comparative  growth 
of  the  British  tonnage  since  the  repeal  of  the  Naviga- 
tion Acts  and  the  decadence  since  i860  of  our  own 
oversea  tonnage  is  shown  in  the  following  table : 

British  Net  United    States 

Oversea  Tonnage.  Gross   Tonnage 

1850 3.565,133  1.58S.711 

i860 4,658,687  2,546,237 

1870 5,690,789  1,516,800 

1880 6,574,513  1,532,810 

1890 7,978,538  946,69s 

1900 9,304,108  816,795 

1901 9,608,420  889,129 

The  loss  between  i860  and  1870  in  our  own  country 
of  oversea  tonnage  is  largely  accounted  for  by  the 
destruction  of  our  merchant  marine  in  the  Civil  War; 
but  it  is  to  be  observed  that  since  1870  there  has  been 
no  improvement,  and  since  1880  the  loss  has  been  go- 
ing on  with  great  rapidity.  England  has  become  to 
some  extent  the  carrier,  not  only  of  the  greater  por- 
tion of  her  own  exports  and  imports,  but  of  a  consid- 
erable part  of  the  exports  and  imports  of  other  coun- 
tries. Besides  her  regular  liners  running  to  the 
United  States,  Canada,  the  West  Indies,  to  China  and 
Japan,  to  India  and  to  other  countries,  amounting 
roughly  to  1,300  vessels,  she  has  also  an  immense  fleet 
of  steamers  and  sailing  vessels  known  as  tramps,  ap- 
proximating in  number  14,000.  These  go  everywhere, 
compete  against  everybody,  cut  into  trade  British, 
foreign  or  colonial,  wherever  they  can  see  profit,  sail 


AMERICAN    AND    ENGLISH    SHIPPING  II3 

from  foreign  port  to  foreign  port,  and  remain  abroad 
often  for  many  years,  and  come  home  only  in  order  to 
complete  the  repairs  necessary  for  them  to  retain  their 
Lloyd's  classification.  According  to  Lloyd's  Register 
of  the  oversea  tonnage  of  the  world's  sail  and  steam, 
the  British  flag  is  flown  by  nearly  one-half  of  sailing 
vessels,  and  more  than  one-half  of  the  steamers.  Out- 
side of  Great  Britain,  there  is  an  average  of  one  ton 
of  shipping  of  all  kinds  to  every  ;^;^  inhabitants,  while 
the  entire  tonnage,  steam  and  sail,  of  the  United  King- 
dom is  equal  to  one  ton  to  every  four  of  its  inhabitants. 
One  out  of  every  36  of  the  adult  male  population  of 
Great  Britain  earns  his  living  on  the  sea.  Of  a  total 
gross  tonnage  of  ocean-going  mercantile  vessels  in 
the  whole  world  of  30  1-3  millions  of  tons  14^  millions 
of  tons  belong  to  Great  Britain  and  her  colonies  or 
48  per  cent,  of  the  whole,  and  of  this  14^  millions 
88  per  cent,  belongs  to  the  mother  country.  But  these 
figures  by  themselves  do  not  give  an  adequate  view  of 
England's  predominance,  unless  account  be  taken  of 
the  equality  as  well  as  the  quantity  of  the  ships  owned. 
It  is  commonly  reckoned  that  one  ton  of  steam  ship- 
ping is  equal  to  four  tons  of  sailing  tonnage  in  effi- 
ciency, and  in  the  year  1900  more  than  eighty  per  cent, 
of  British  shipping  consisted  of  steam-shipping,  while 
of  the  shipping  of  the  rest  of  the  world  only  seventy 
per  cent,  was  steam  tonnage.  With  this  correction 
Great  Britain's  proportion  rises  to  fifty  per  cent,  of 
8 


114  THE   TARIFF   AND   THE   TRUSTS 

the  sailing  and  steam  tonnage  of  the  whole  world. 
This  is  true  in  spite  of  the  fact  that  France,  Russia, 
Spain,  Portugal,  and  the  United  States  have  reserved 
their  coasting  trades  for  vessels  flying  their  own  flags, 
whilst  the  coasting  trade  of  Great  Britain  and  her 
colonies,  as  stated  above,  is  open  to  the  vessels  of  all 
nations.  But  France  (except  Algeria),  Germany, 
Holland,  Denmark,  Sweden  and  Norway,  Belgium, 
Austria  and  Italy,  permit  British  vessels  to  trade  with 
their  oversea  possessions ;  the  only  countries  which 
prevent  all  other  foreigners  from  invading  their  coast- 
wise colonial  trade  are  the  United  States,  Russia  and 
Spain.  The  United  States,  which  ought  to  be  leading 
all  other  countries  in  liberty  in  shipbuilding  and  in 
commerce,  alone  among  all  nations  preserves  the  pro- 
vision that  its  own  citizens  shall  not  be  allowed  to 
register  vessels  built  in  other  countries,  and,  with 
Russia  and  Spain,  prohibits  all  foreigners  from  enjoy- 
ing its  colonial  coastwise  trade.  The  tramp  steamers 
which  run  from  and  return  to  English  ports,  carrying 
largely  coal  in  their  outward  voyage,  return  with 
grain,  timber,  cotton  and  other  bulky  cargoes  on  their 
homeward  voyage.  Since  the  year  1900  we  have  been 
the  producers  of  the  greatest  amount  of  coal  annually 
of  any  country  in  the  world.  Our  deposits  of  coal 
are  the  greatest  to  be  found  in  any  country  in  the 
world.  Our  production  of  iron  and  steel  is  the  great- 
est in  the  world,  and,  as  mentioned  in  prior  chapters, 


AMERICAN    AND    ENGLISH    SHIPPING  II5 

we  produce  about  as  much  pig  iron  yearly  as  any  oth- 
er two  countries  in  the  world.  The  supremacy  in 
steamships  in  the  future  lies  with  the  country  produc- 
ing the  greatest  amount  of  coal,  iron  and  steel.  With 
free  ships  and  free  trade  in  the  material  which  goes 
into  the  building  of  a  ship,  we  can  soon  lead  the  world 
in  the  number  of  our  steamships. 

In  the  debate  in  the  House  of  Commons  on  the  Corn 
Laws  in  1842  a  member,  Captain  Layard,  said  that 
when  he  was  in  China  he  had  been  shocked  at  the 
barbarous  custom  of  contracting  the  feet  of  the  chil- 
dren, and  he  had  expressed  his  surprise  to  some 
Chinese  gentlemen  at  its  continuance.  They  apolo- 
gized for  it  by  explaining  that  there  were  certain  old 
women  who  made  their  living  doing  this  work,  and 
that  the  welfare  of  these  old  women  required  the 
maintenance  of  the  practice.  When  the  stage  coach 
gave  way  to  the  railway,  the  stage  drivers  appealed 
to  a  sympathetic  public  that  they  would  be  ruined  if 
steam  railways  were  allowed  to  continue.  The  first 
gas  company  was  formed  in  London  in  1807.  Speak- 
ers in  the  House  of  Commons  contended  that  if  the 
bill  were  to  pass,  it  would  throw  out  of  employment 
ten  thousand  seamen  engaged  in  the  whale  fisheries 
and  thousands  of  rope-makers,  sail-makers  and  mast- 
makers  connected  with  that  trade.  The  owners  of 
American  shipyards  appeal  to  the  shining  example  of 
China,  and  say  to  us,  as  the  Chinaman  says,  "Let  us 


Il6  THE    TARIFF    AND   THE   TRUSTS 

have  as  few  dealings  as  possible  with  'foreign  devils.' " 
Are  we  really  living  in  an  age  of  enlightenment  when 
we  adopt  as  a  model  the  example  of  China?  Are  not 
the  people  actually  impotent  in  their  inability  to  re- 
peal this  barbarous  statute?  Are  the  private  interests 
of  the  Cramps  to  control  the  policy  of  a  great  nation 
like  ours?  Let  us  commence  legislating  upon  the  prin- 
ciple of  the  greatest  good  to  the  greatest  number  in- 
stead of  the  greatest  good  to  the  Cramps. 


CHAPTER  IV 

PROTECTIVE   TARIFFS   AND    PUBLIC   VIRTUE 

The  most  important  consideration  for  the  patriotic 
citizen  in  connection  with  the  tariff  question  and  the 
trust  is  their  effect  through  poHtical  parties  upon  Con- 
gressmen, upon  beneficiaries  of  the  tariff,  upon  the 
lives  and  characters  of  the  men  and  women  who  are 
the  real  strength  of  the  Republic.  The  seekers  after 
protective  tariffs  have  been  corrupting  both  them- 
selves and  our  public  men.  If  the  true  history  of 
tariff  legislation  could  be  written,  the  revelation  would 
arouse  the  whole  people  to  indignation.  If  it  did  not 
arouse  them  to  such  indignation,  it  would  be  con- 
clusive proof  that  our  people  do  not  appreciate  free 
government,  and  do  not  appreciate  the  evils  which  en- 
danger it.  Many  years  ago  the  industrial  captains  of 
the  country  and  the  political  leaders  struck  hands, 
with  the  result  that  both  political  parties  have  lost 
sight  of  the  public  welfare.  There  was  never  a  great- 
er danger  to  government  than  has  come  from  this  un- 
holy alliance.  Think  of  the  terrific  power  created 
when  political  parties  and  the  government  ally  them- 
selves with  the  industrial  wealth  of  the  trusts.     You 

117 


Il8  THE   TARIFF    ANEV  THE   TRUSTS 

there  unite  the  two  most  powerful  tendencies  in  our 
national  life,  the  pursuit  of  wealth  on  the  one  hand 
and  the  pursuit  of  political  power  on  the  other;  and 
the  affiliation  is  one  which  will  surely  corrupt  the  peo- 
ple and  eventually  wreck  the  government.  Christ, 
with  a  profound  knowledge  of  human  nature,  taught 
his  disciples  to  pray  that  they  should  not  be  led  into 
temptation.  Though  a  considerable  proportion  of  the 
American  people  profess  his  teachings,  yet  they  have 
deliberately  given  to  their  legislators  the  power,  by 
Congressional  enactment,  of  transferring  millions  of 
dollars  from  the  hands  of  the  people  to  the  pockets  of 
a  few  industrial  leaders.  A  more  stupendous  instru- 
ment for  corrupting  Congressmen  than  the  lodging  of 
this  power  in  them  was  never  conceived  by  the  per- 
verse ingenuity  of  man.  Place  three  or  four  hundred 
Republicans  or  Democrats  of  approved  honesty  in 
Congress,  continue  them  there  for  a  few  years  under 
the  temptation  of  such  an  alliance  of  public  power 
with  private  business,  and  a  considerable  proportion 
of  their  number  will  surely  yield  to  the  temptation  to 
make  money  out  of  tariff  legislation.  Daniel  Webster 
well  said,  "The  deadliest  canker  that  can  attack  the 
heart  of  a  nation  is  the  corroding  disease  of  commer- 
cial avarice."  This  commercial  avarice,  the  fiercest 
passion  that  burns  in  the  heart  of  man,  is  closely  allied 
with  that  other  passion  of  ambition  for  power  and 
place  but  little  less  terrible  in  its  intensity.     Congress- 


PROTECTIVE   TARIFFS   AND    PUBLIC   VIRTUE  II9 

men  and  United  States  Senators  early  saw  the  danger 
from  this  alliance,  and  prophesied  that  it  would  result 
in  the  ruin  of  their  country.  In  1828  Senator  Mc- 
Duffie,  of  South  Carolina,  in  opposing  the  passage  by 
the  United  States  Senate  of  the  tariff  act  of  that  year 
said :  "Sir,  when  I  consider  that  by  a  single  act  like  the 
"present  from  five  to  ten  millions  of  dollars  may  be 
"transferred  annually  from  one  part  of  the  commu- 
"nity  to  another ;  when  I  consider  the  disguise  of  dis- 
"interested  patriotism  under  which  the  basest  and 
"most  profligate  ambition  may  perpetuate  such  an  act 
"of  injustice  and  political  prostitution,  I  cannot  hesi- 
"tate  for  a  moment  to  pronounce  this  very  system  of 
"indirect  bounties  the  most  stupendous  instrument  of 
"corruption  ever  placed  in  the  hands  of  public  func- 
"tionaries.  It  brings  ambition  and  avarice  and  wealth 
"into  a  combination  which  it  is  fearful  to  contemplate, 
"because  it  is  almost  impossible  to  resist.  Do  we  not 
"perceive  at  this  moment  the  extraordinary  and  mel- 
"ancholy  spectacle  of  less  than  a  hundred  thousand 
"capitalists,  by  means  of  this  unhallowed  combination, 
"exercising  an  absolute  and  despotic  control  over  the 
"opinions  of  eight  millions  of  free  citizens  and  the 
"fortunes  and  destinies  of  ten  millions?  Sir,  I  will  not 
"anticipate  or  forbode  evil,  I  will  not  permit  myself  to 
"believe  that  the  Presidency  of  the  United  States  will 
"ever  be  bought  and  sold  by  this  system  of  bounties 
"and  prohibitions;  but  I  must  say  that  there  are  cer- 


120  THE   TARIFF    AND   THE   TRUSTS 

"tain  quarters  of  this  union  in  which  if  a  candidate  for 
"the  Presidency  were  to  come  forward  with  the  Har- 
"risburg  Tariff  in  his  hand,  nothing  could  resist  his 
"pretensions  if  his  adversary  were  opposed  to  this  un- 
"just  system  of  oppression."  The  same  foreboding 
of  evil  to  our  free  government  from  this  cause  is  found 
in  the  last  message  of  President  Jackson  to  Congress ; 
and  I  submit  that  these  prophesies  are  being  sadly 
realized  in  our  day. 

"Are  Congressmen  bought  by  the  Trusts?"  the 
reader  asks.  Undoubtedly  in  some  cases.  A  man 
with  the  resolve  to  do  his  duty  is  elected  to  Congress. 
The  air  around  him  in  Congress  is  heavy  with  the  cry 
of  corruption.  He  becomes  satisfied  that  conditions 
of  corruption  exist.  He  hears  no  indignation  ex- 
pressed at  their  existence,  and  by  and  by  he  falls.  By 
what  is  too  frequently  regarded  as  a  successful  stroke 
he  gets  more  in  a  day  than  he  can  earn  in  a  year  by 
patient  effort.  You,  the  American  people,  have 
recognized  the  right  of  government  to  confer  favors 
upon  private  business,  and  you  have  created  the  temp- 
tation which  became  too  strong  for  this  man,  and  you 
are  accountable  to  some  extent  for  his  fall.  If  you 
doubt  that  men  fall  in  this  way,  let  me  call  your  atten- 
tion to  one  case  which  will  illustrate  many  others. 
From  1867  on  the  Pacific  Mail  was  seeking  subsidies 
from  the  National  Government  through  Congress. 
They    procured   subsidies   amounting   to   millions   of 


PROTECTIVE   TARIFFS    AND    PUBLIC   VIRTUE         121 

dollars,  but  later  in  1874  it  was  disclosed  that  Allen 
Stockvv-ell,  the  president  of  the  Pacific  Mail,  with  the 
consent  of  the  directors  of  the  Company,  spent,  through 
its  agent,  Irwin,  nearly  a  million  dollars  among  Con- 
gressmen to  secure  the  bill  granting  the  subsidy.  J. 
G.  Schumaker,  a  member  of  the  House  of  Representa- 
tives, was  found  to  have  received  $300,000,  for  which 
sum  he  could  not  account  through  failure  of  memory. 
The  circumstances  tended  to  show  that  he  distributed 
this  money  among  other  members.  King,  the  Post- 
master of  the  House  of  Representatives,  who  had  also 
been  elected  as  a  member  of  Congress,  fled  to  Canada. 
Other  members  of  Congress  were  thought  to  be  im- 
plicated, but  no  proof  could  be  obtained.  The  Pacific 
Mail  is  only  one  of  many  such  cases  which  the  reader 
will  recall.  In  those  days  the  disclosure  of  the  fact 
that  a  public  man  had  been  even  remotely  connected 
with  such  a  transaction  resulted  in  his  dropping  out  of 
public  life.  You  will  all  remember  that  the  name  of  a 
man  who  had  been  Vice-President  of  the  United  States 
appeared  in  connection  with  alleged  corruption,  and 
he  retired  from  public  life.  You  will  all  remember 
what  resulted  from  the  disclosures  with  reference  to 
the  famous  "Credit  Mobilier." 

The  approved  method,  however,  of  procuring  tariff 
legislation  is  by  contributions  on  the  part  of  trusts 
and  other  beneficiaries  of  the  tariff  to  the  campaign 
disbursements  of  both  political  parties  in  cases  where 


122  THE    TARIFF    AND   THE    TRUSTS 

they  are  in  doubt  as  to  which  party  will  win.  The 
mightiest  of  all  the  influences  which  bring  about  the 
nomination  and  election  of  Presidents  and  Congress- 
men, of  Mayors  and  Aldermen,  is  the  financial  aid 
which  the  great  trusts  and  their  allied  corporations 
are  ready  and  anxious  to  contribute  to  political  funds. 
In  national  campaigns  about  every  protected  trust 
opens  its  bank  balance  to  one  or  both  political  parties. 
The  right  to  tax  the  Roman  people  and  provinces  in  the 
days  of  Rome's  fall  was  sold  at  auction  by  the  Praeto- 
rian Guards.  The  right  to  tax  the  American  people  by 
these  giant  trusts  is  sold  just  as  surely  and  just  as 
clearly  in  every  national  campaign.  The  party  man- 
ager says  to  the  manufacturer,  "You  cannot  make  a 
more  profitable  investment.  Protection  has  made  you 
rich,  free  trade  will  make  you  poor.  If  we  are  beaten, 
our  adversaries  will  give  you  free  trade.  These  are 
the  conditions.  Come  down  with  your  cash."  This 
argument,  followed  by  the  gifts  of  money,  puts  the 
control  of  the  tariff  question  touching  every  man, 
woman  and  child  in  the  United  States  in  the  hands  of 
political  leaders  and  United  States  Senators  who  have 
actually  taken  the  money  of  the  corporations  under  a 
pledge  to  give  them  what  they  want.  Has  the  reader 
any  doubt  about  this?  Let  us  see.  In  1888  James  B. 
Foster,  the  president  of  a  political  league,  wrote  the 
famous  letter  in  which  this  language  appears :  "The 
manufacturers  of  Pennsylvania,  who  are  more  highly 


PROTECTIVE   TARIFFS   AND    PUBLIC   VIRTUE         1 23 

protected  than  anybody  else,  and  who  make  large  for- 
tunes every  year  when  times  are  prosperous,  are  not 
giving  as  they  ought  to.  If  I  had  my  way  about  it,  I 
would  put  the  manufacturers  over  the  fire  and  fry  all 
the  fat  out  of  them."  When  you  find  great  insurance 
companies  during  the  last  few  years  paying  hundreds 
of  thousands  of  dollars  to  the  campaign  committees 
of  political  parties  in  national  campaigns,  where  the 
directors  of  those  companies  are  in  almost  every  case 
closely  connected  with  great  manufacturing  and  rail- 
road interests,  do  you  still  doubt  that  the  direct  bene- 
ficiaries of  the  tariff,  the  trusts,  pay  their  good  money 
to  political  leaders  and  United  States  Senators?  Do 
men  give  large  sums  for  campaign  disbursements  to 
political  parties  without  expecting  some  return?  An 
official  of  the  National  City  Bank  of  New  York  after 
the  election  of  1896  delicately  reminded  the  Secretary 
of  the  United  States  Treasury  of  the  obligations  which 
his  party  owed  to  that  great  banking  institution  for 
financial  contributions  in  the  campaign,  and  suggested 
that  obligation  to  this  high  ofiticial  as  a  reason  why  he 
should  grant  favors  to  the  City  Bank.  Such  obliga- 
tions seem  to  be  recognized  at  Washington,  since  in 
1899  the  Secretary  of  the  Treasury  entered  into  a  con- 
tract with  the  National  City  Bank  to  sell  the  Bank  the 
old  Custom  House  property  occupying  an  entire  block 
in  Wall  Street  for  $3,265,000,  which  sum  is  estimated 
by  real  estate  men  to  be  about  one-half  its  real  value. 


124  THE    TARIFF    AND   THE    TRUSTS 

At  the  time  of  this  purchase  the  National  City  Bank 
had  many  milUons  on  deposit  belonging  to  the  Nation- 
al Government,  and  it  paid  the  Government  on  ac- 
count of  the  purchase  price  $3,215,000,  leaving  a 
balance  due  the  Government  of  $50,000,  It  made  this 
payment  by  transferring  on  the  books  of  the  Bank  that 
amount  from  one  account  to  the  other,  never  really 
paying  a  single  dollar  of  money  to  the  Government, 
but  giving  it  credit  for  the  amount  of  its  purchase. 
'The  Bank,  having  paid  for  the  property,  should  have 
taken  a  deed  thereof  and  have  paid  its  taxes  on  it  to 
the  City.  Instead,  it  rented  the  building  to  the  United 
States  Government  as  a  Custom  House  from  that  day 
until  the  present  time  for  an  annual  rental  of  $130,600, 
but  left  the  title  in  the  Government,  thus  avoiding  the 
payment  of  all  taxes  thereon.  Such  returns  for  cam- 
paign disbursements  are  the  order  of  the  day.  Mr. 
Herbert  S.  Hadley,  the  Attorney-General  of  Missouri, 
recently  well  said:  "If  you  search  for  an  explanation 
as  to  how  and  why  it  was  that  the  City  Counsel  or 
State  Legislator  has  been  bribed,  you  will,  in  the  great 
majority  of  cases,  find  that  some  business  interest  has 
been  seeking  some  special  privilege  or  dishonest  ad- 
vantage which  it  could  not  secure  by  the  honest  judg- 
ment of  the  representatives  of  the  people." 

Now,  let  us  see  how  the  giving  of  money  by  trusts 
affects  the  result  of  elections.  In  a  national  election 
in  the  average  doubtful  state   forty  per  cent,  of  the 


PROTECTIVE   TARIFFS   AND    PUBLIC   VIRTUE  125 

people  will  vote  the  Republican  ticket,  and  another 
forty  per  cent,  of  the  people  will  vote  the  Democratic 
ticket  in  any  event,  and  in  such  a  state  the  party  gets 
the  electoral  vote  which  controls  a  majority  of  the  re- 
maining twenty  per  cent.  With  the  money  furnished 
by  trusts  the  parties  controlling  the  campaign  seek  to 
procure  a  majority  of  that  twenty  per  cent.,  first  prob- 
ably by  trying  to  convince  them  that  their  interests  He 
with  the  party  seeking  their  votes,  and  eventually  by 
purchasing  a  considerable  portion  of  their  votes  if 
they  cannot  be  obtained  in  any  other  way.  In  1888 
William  W.  Dudley,  Treasurer  of  the  National  Re- 
publican Committee,  said  in  a  letter  of  instruction  to 
the  campaign  workers  of  his  party  in  the  State  of 
Indiana:  "Divide  the  floaters  into  blocks  of  fives  and 
put  a  trusted  man  with  necessary  funds  in  charge  of 
these  fives,  and  make  them  responsible  that  none  get 
away,  and  that  all  vote  our  ticket."  A  few  years 
earlier  Barnum,  of  Connecticut,  Chairman  of  the 
National  Democratic  Committee,  sent  his  celebrated 
order  for  the  purchase  of  "mules."  One  party  or  the 
other  having  succeeded  in  the  election  of  their  Presi- 
dential candidate,  the  time  for  making  return  for  the 
money  arrives,  and  a  powerful  Senator  who  knows 
who  contributed,  or  a  political  leader  who  dictates  the 
action  of  his  party,  sees  to  it  that  the  return  therefor 
is  made  in  tariff  or  other  favors.  ^lany  a  time  a 
member   of   Congress    votes    for    measures    which   he 


126  THE    TARIFF    AND   THE   TRUSTS 

knows  or  ought  to  know  are  wrong,  and  his  only  re- 
turn is  the  consciousness  that  he  has  paid  a  poHtical 
debt  for  his  party  and  cared  for  the  interests  of  some 
rich  corporation  which  has  contributed  Hberally. 
Henry  Loomis  Nelson,  now  Professor  of  Political 
Economy  in  Williams  College,  in  January,  1900,  wrote : 
"Since  1875  Congress  has  not  legislated  on  the  tariff: 
it  has  simply  affirmed  or  ratified  the  decrees  of  the 
beneficiaries  of  the  tariff.  These  people  have  trans- 
formed the  government  into  a  socialism  in  which  they 
are  not  merely  the  favored  class,  they  constitute  the 
only  class.  The  House  of  Representatives  passed  the 
Mills  "Bill  of  1888,  but  the  Senate  was  then  Republican 
and  protectionist,  and  the  protected  interests  turned 
the  bill  into  a  protection  measure.  The  popular 
branch  of  Congress  also  passed  the  Wilson  Bill  in 
1894,  but  the  protected  interests  transformed  it  in  the 
Senate  through  the  aid  of  Democratic  Senators."  It 
is  no  longer  a  question  between  political  parties 
whether  this  matter  of  bribery  shall  go  on.  Its  im- 
portance rises  mountain  high  above  all  partisan  con- 
siderations. No  truly  patriotic  citizen  ought  to  care 
a  fig  whether  the  Republican  party  or  the  Democratic 
party  goes  up  or  down,  if  the  party  really  in  power 
gets  there  without  using  such  practices,  truly  repre- 
sents public  opinion,  and  legislates  wisely  with  refer- 
ence to  public  interests.  This  question  of  the  use  of 
money  to  control  legislation  ought  to  rise  in  impor- 


PROTECTIVE   TARIFFS   AND    PUBLIC    VIRTUE  12/ 

tance  far  above  one's  party  affiliations.  The  trust 
which  furnishes  money  to  carry  on  campaigns  under 
an  implied  agreement  that  in  case  of  victory  such  leg- 
islation as  it  desires  shall  be  passed  is  a  hundred  times 
more  dangerous  to  the  existence  of  our  free  govern- 
ment than  any  anarchist  who  has  ever  threatened  the 
life  of  our  rulers.  The  men  who  purchase  such  legis- 
lation do  not  assail  mere  individual  life ;  they  assail 
the  life  and  welfare  of  a  whole  nation.  The  hell  of 
public  execration  should  have  no  corner  too  hot  for 
such  men.  A  flame  of  public  indignation  at  such 
crimes  against  the  life  of  the  nation  should  drive  them 
from  social  life.  They  are  recreant  to  every  duty  of 
a  citizen,  recreant  to  their  country,  recreant  to  virtue, 
and  recreant  to  honor  itself.  They  are  as  clearly 
enemies  of  the  Commonwealth  as  though  they  came 
with  arms  in  their  hands  to  attack  and  destroy  it. 
Our  country  will  never  go  down  in  the  momentous 
sweep  of  battle ;  but  it  will  as  surely  die  from  corrup- 
tion as  the  moral  law  pervades  the  universe  if  these 
conditions  continue  to  exist.  In  the  midst  of  the 
whirlwind,  now  as  in  the  olden  days,  is  the  voice  of 
God ;  the  great  soul  of  the  universe  is  just. 

Another  source  of  corruption  is  found  in  the  fact 
that  United  States  Senators  and  Representatives  are 
themselves  frequently  owners  of  manufacturing  in- 
terests which  are  largely  affected  by  tariff  legislation; 
and,  notwithstanding  the  fact  that  these  men  are  per- 


128  THE   TARIFF   AND    THE   TRUSTS 

sonally  interested  in  the  passage  of  a  bill  allowing 
them  to  mulct  the  American  people,  they  deliberately 
vote  upon  such  measures  in  the  Senate  and  the  House. 
Many  an  afflicted  man  or  woman  in  raising  a  memo- 
rial to  their  dead  have  paid  by  reason  of  the  tariff  a 
considerably  increased  price  to  a  United  States  Sen- 
ator interested  in  quarries.  Many  a  consumer  in  the 
purchase  of  clothing  has  paid  another  tribute  to  a 
member  of  the  House  of  Representatives  who  is  en- 
gaged in  manufacturing.  Many  a  Senator  has  voted 
upon  tariff  bills  which  imposed  duties  upon  bituminous 
coal  when  he  was  directly  interested  in  such  coal  mines 
and  in  connecting  railways.  Directly  or  indirectly 
about  every  Senator  in  the  United  States  Senate  is 
largely  interested  in  manufacturing  or  mining  or  some 
other  industry  affected  by  the  tariff.  The  United 
States  Senators,  as  a  rule,  control  the  organization  of 
their  party  in  their  respective  states ;  and  the  power  of 
the  party  organization  in  the  United  States  is  such  as 
is  found  in  no  other  country  in  the  world.  It  not  only 
absolutely  determines  actual  legislation,  but  it  controls 
almost  with  despotic  power  the  vast  patronage  of 
government.  Privilege,  patronage  and  protection  are 
what  make  a  United  States  Senator  in  these  days  all 
powerful.  A  monopoly  which  desires  to  have  farmed 
out  to  it  a  part  of  the  taxing  power  of  government  can 
afford  to  own  a  United  States  Senator  in  one  of  the 
smaller  states ;  and,  by  a  combination  of  the  owners  of 


PROTECTIVE    TARIFFS    AND    PUBLIC   VIRTUE  I29 

a  few  such  Senators,  the  tariff  can  be  increased,  or  a 
change  in  the  law  can  be  headed  off,  and  all  attempts  to 
relieve  the  people  absolutely  thwarted.  The  total  vote 
of  Nevada  a  few  years  ago  was  only  about  ii,ooo.  Mr. 
Stewart  for  a  long  time  represented  that  small  con- 
stituency in  the  United  States  Senate.  When  discus- 
sion over  the  duty  on  borax  was  before  the  Senate,  it 
was  claimed  by  those  opposed  to  the  duty  that  the 
Pacific  Borax  and  Redwood  Chemical  Works  was  about 
to  be  sold  to  an  English  company,  when  Senator 
Stewart  arose  and  said  that  he  understood  that  ''there 
had  been  an  attempt  to  make  this  sale  in  Europe  in  good 
faith,  but  I  think  the  whole  matter  fell  through.  It  was 
one  of  the  bombastic  prospectuses  that  the  English  put 
out.  It  must  be  an  exaggeration."  Through  recreancy 
to  duty  on  the  part  of  this  United  States  Senator  and 
upon  the  part  of  Senator  Perkins  and  Senator  White, 
of  California,  the  outrageous  duty  upon  borax  was  im- 
posed. But  the  wrong  is  not  alone  in  United  States 
Senators.  The  people  themselves  are  in  many  cases 
corrupt.  Senator  Clark,  of  Montana,  was  able  to 
control  a  majority  of  the  Legislature  in  that  state,  and 
thus  secured  a  seat  in  the  United  States  Senate,  where 
a  unanimous  report  from  the  Committee  on  Elections 
found  that  his  election  was  procured  by  bribery. 
However,  he  returned  to  Montana,  and  the  Legisla- 
ture of  that  state,  knowing  that  he  had  procured  his 
prior  election  by  the  corrupt  use  of  money,  re-elected 
9 


130  THE   TARIFF   AND   THE   TRUSTS 

him,  and  to-day  he  sits  in  the  United  States  Senate 
legislating  upon  many  industries  in  which  he  is  inter- 
ested; and  the  people  of  Montana  are  probably  not 
ashamed  of  being  represented  by  such  a  Senator. 

The  control  of  the  newspapers  by  special  interests 
and  trusts  is  a  most  dangerous  result  of  protective 
tariffs.  A  great  newspaper  in  one  of  our  larger  cities 
requires  a  large  investment  of  money  to  organize  it  in 
the  first  place  and  a  larger  amount  to  continue  it  until 
it  becomes  self-sustaining.  Many  of  the  stockholders 
and  directors  of  newspaper  corporations  are  interested 
in  manufacturing  interests,  and  the  policy  of  the 
paper  is  directed  with  reference  to  those  interests. 
The  newspaper  makes  its  money  from  the  proceeds  of 
advertisements,  and  the  industrial  combinations  ex- 
pend large  sums  of  money  in  advertising.  In  national 
campaigns  vast  sums  of  money  are  expended  in  direct- 
ing and  controlling  the  opinions  of  the  press.  The 
result  is  that  many  of  our  newspapers  do  not  recognize 
the  interests  of  any  other  class  but  the  producing 
class.  Times  are  prosperous,  according  to  such 
papers,  when  the  corporations  are  making  money.  We 
are  developing  rapidly  when  the  millionaires  are  add- 
ing millions  to  their  already  large  fortunes.  The 
trust-controlled  paper,  instead  of  direct,  courageous, 
helpful  dealing  with  public  questions,  fills  its  columns 
with  accounts  of  battles  never  fought,  of  things  never 
done,  and  with  the  fleeting  popular  passion  or  sensa- 


PROTECTIVE   TARIFFS   AND   PUBLIC   VIRTUE  I3I 

tion  of  the  moment.  Instead  of  pointing  out  the  real 
cause  of  abuses,  and  seeking  to  have  it  removed,  they 
attribute  all  abuses,  however  remote  the  cause,  to  the 
officials  in  power  at  the  time,  so  that  they  can  have 
some  one  prominently  before  the  people  to  "pound." 
These  newspapers  encourage  the  conditions  which 
bring  abuses,  and  then  seek  popular  favor  by  attacking 
the  abuses  when  they  appear.  They  select  men  of 
straw  to  trample  upon,  announce  platitudes  with 
ponderous  affectation  of  wisdom,  and,  as  has  been 
well  said,  assail  with  great  vigor  "The  Czar,  the 
Kaiser,  and  the  Sultan,  and  sock  it  to  all  the  satraps 
at  a  safe  distance."  But  they  carefully  avoid  vital, 
living  public  questions  which  lie  at  the  foundation  of 
the  welfare  and  happiness  of  every  humble  home  in 
the  land.  The  remedy  prescribed  by  such  newspapers 
for  evils  is  always  a  penal  statute  which  they  know,  or 
ought  to  know,  will  never  be  enforced.  The  influence 
of  this  kind  of  newspaper,  and  often  its  deliberate  in- 
tention, is  simply  to  divert  the  attention  of  its  readers 
from  the  real  causes  of  public  evils. 

The  secondary  forms  of  corruption  which  spring 
indirectly  from  protective  tariffs  are  all-pervasive  in 
American  life.  So  successful  have  been  the  combina- 
tions of  wealth  and  avarice  in  controlling  national 
legislation  that  to-day  few  men  think  of  striving  for 
wealth  in  any  great  business  adventure  without  either 
national  or  state  aid  in  the  form  of  special  legislation. 


132  THE    TARIFF   AND   THE   TRUSTS 

Young  men,  in  fact  all  classes  of  men,  placing  less 
confidence  than  in  the  olden  times  in  industry  and 
economy,  turn  their  eyes  to  legislation  as  the  sure 
source  of  wealth ;  and  therefrom  springs  the  feverish, 
speculative,  unscrupulous  spirit  of  the  day  which  is 
sapping  and  destroying  our  fine  young  American  man- 
hood. Once  let  it  be  fully  accepted  as  a  legitimate  fea- 
ture of  public  policy  that  the  great  public  power  of  tax- 
ation may  be  used  for  private  purposes,  and  you  cor- 
rupt the  whole  people,  and  turn  their  attention  from 
procuring  wealth  through  industry  and  economy  to 
procuring  it  by  legislation. 

Protective  tariffs  invariably  result  in  an  amount  of 
revenue  in  excess  of  the  needs  of  government,  or,  when 
the  duties  are  so  high  as  to  greatly  restrict  importa- 
tion, in  deficits  in  revenue.  The  tarifif  of  1872,  the 
tariff  of  1883,  and  the  tariff  of  1890  were  each  oc- 
casioned by  the  accumulation  of  a  great  surplus  over 
the  necessities  of  government  in  the  treasury.  The 
McKinley  Tariff  of  1890  placed  duties  so  high  as  to 
unduly  obstruct  importation  and  therefore  reduce  the 
income,  and  did  not  furnish  sufficient  funds  for  carry- 
ing on  the  government.  There  has  been  a  consider- 
able deficiency  under  the  present  tariff  to  meet  the  ex- 
penses of  government  in  the  years  1904  and  1905.  The 
result  of  all  this  has  been  frequent  changes  in  the 
tariff,  extravagant  expenditure  of  money  to  get  rid  of 
the  surplus,  anxiety  and  apprehension  on  the  part  of 


PROTECTIVE   TARIFFS   AND    PUBLIC   VIRTUE  I33 

business  interests  fearing  a  revision  of  the  tariff  and 
all  the  demoralization  which  comes  from  such  condi- 
tions. The  friends  of  protection  are  always  the  friends 
of  the  distribution  of  public  money,  and  public  ex- 
travagance is  one  of  the  most  effectual  means  of 
destroying  public  virtue.  Public  extravagance  in 
national  matters  has  resulted  from  the  fact  that  the 
surplus  income  must  be  disposed  of  in  order  to  rcriove 
its  existence  as  an  objection  to  high  tariffs.  Twenty 
commodities  like  tea,  coft'ee.  etc.,  could  oe  selected 
which  would  produce  as  much  revenue  as  the  present 
tariff  and  would  not  afford  the  frequent  surplus  call- 
ing for  a  change  in  the  tariff.  Indirect  taxation 
through  tariffs  is  a  source  of  public  extravagance  and 
demoralization.  Does  any  intelligent  man  believe  for 
a  moment  that  our  annual  pension  list  would  have 
reached  even  $50,000,000,  instead  of  $160,000,000,  had 
it  been  necessary  to  raise  the  money  devoted  to  that 
purpose  by  direct  taxation?  Would  our  representa- 
tives in  Congress  dare  to  multiply  ofifices,  approve 
thousands  of  unmeritorious  private  claims  against 
government,  enact  wasteful  river  and  harbor  bills,  and 
squander  the  public  money  if  the  national  expenses  had 
to  be  defrayed  by  an  overt,  irritating  tax  dragging  the 
money  directly  from  the  citizen's  pocket?  The  cost 
of  the  administration  of  the  national  government  for 
the  last  four  years,  exclusive  of  all  expenses  in 
Panama,  exceed  those  of  the  four  prior  years  by  the 


134  THE   TARIFF   AND   THE   TRUSTS 

extraordinary  sum  of  $436,104,699.  Bismarck,  as  it 
will  appear  in  the  chapter  on  German  Tariffs,  frankly 
gave,  as  the  reason  for  changing  the  policy  of 
Germany  from  direct  to  indirect  taxation  in  1879, 
that  by  such  taxation  the  money  of  the  people  could 
be  taken  without  their  knowing  it.  It  is  the  old  story, 
but  ever  a  true  one,  that  government  wishes  to  pluck 
the  feathers  from  the  goose  with  as  little  squawking 
as  possible. 

A  war  between  our  own  country  and  another  coun- 
try would  be  a  most  prolific  source  of  demoralizing 
our  people,  and  wars  are  often  the  result  of  protective 
and  retaliatory  tariffs.  Four  years  ago  we  decided, 
in  the  interests  of  the  American  sugar  refiners,  to  levy 
a  countervailing  duty  on  Russian  bounty-fed  sugar. 
Russia  retaliated  by  promptly  levying  high  duties 
against  our  metal  exports,  reducing  exportation  large- 
ly, and  this  continued  for  two  or  three  years.  In  1888 
and  1889  a  bitter  tariff  war  existed  between  France 
and  Italy,  causing  millions  of  loss  to  both  countries. 
In  1893  another  bitter  tariff  war  continued  for  a  con- 
siderable part  of  the  year  between  France  and  Switzer- 
land, and  in  the  same  year  a  violent  tariff  war  between 
Germany  and  Russia  broke  out,  causing  great  loss  to 
both  countries. 

Another  evil  resulting  from  protective  tariffs  is  the 
centralization  of  government.  The  acceptance  of  the 
protectionist  idea  that  under  the  guise  of  law  govern- 


PROTECTIVE   TARIFFS    AND    PUBLIC    VIRTUE         I35 

ment  can  delegate  to  private  corporate  interests  the 
right  to  collect  from  the  whole  people  a  price  for  the 
necessaries  of  life  beyond  their  competitive  values  is  a 
perversion  of  the  fundamental  principles  on  which 
constitutional  liberty  rests.  If  a  tariff  bill  were  passed 
specifying  its  actual  purposes,  the  courts  would  be 
forced  to  declare  it  unconstitutional.  If  you  were  to 
ask  any  man  whether  the  legislature  has  any  right  to 
authorize  him  to  put  his  hand  into  your  pocket  and 
take  your  money  for  his  advantage,  he  would  prompt- 
ly answer  "No."  Now,  is  it  safe  to  place  in  the  hands 
of  government  the  right  to  permit  a  few  men  to  sell 
their  goods  to  the  millions  of  consumers  at  a  higher 
price  than  they  otherwise  could?  Macaulay,  speak- 
ing of  Charles  I,  said,  "No  man  is  fit  to  rule  over  a 
people  who  listens  to  the  few  who  have  access  to  him 
as  against  the  many  whom  he  will  never  see."  He 
might  have  said,  further,  that  no  people  ever  wisely 
gave  the  right  to  government  to  favor  the  few  who 
have  access  to  it  at  the  expense  of  the  many  whom  its 
officials  will  never  see.  Such  a  power  reposed  in 
government  is  a  danger  to  democratic  government. 
Such  a  power  in  government  is  despotic  in  its  very 
nature,  and  under  its  exercise  government  cannot  but 
become  more  and  more  centralized.  Such  centraliza- 
tion has  been  the  tendency  in  both  state  and  national 
government  in  recent  years.  The  Speaker  of  the  House 
of  Representatives  usurps  the  legislative  power  of  the 


136  THE    TARIFF    AND   THE   TRUSTS 

House.  The  committee  upon  rules  in  state  and 
national  Legislatures  ties  the  hands  of  individual  mem- 
bers, and  all  legislation  in  the  last  days  of  a  session  is 
practically  dictated  by  two  or  three  men.  The  House 
of  Representatives,  intended  by  the  framers  of  the 
Constitution  to  reflect  the  will  of  the  whole  people, 
has  lost  its  power  and  prestige.  The  Senate,  com- 
posed of  comparatively  few  Senators,  elected  in  many 
instances  through  the  corrupt  use  of  money  has  be- 
come all-powerful.  Local  self-government  in  towns 
and  cities  is  usurped  by  state  legislatures.  Abuses 
accustom  men  to  rely  upon  the  strong  power  of  gov- 
ernment for  a  remedy  and  bring  about  a  condition 
of  paternalism  that  makes  "Little  Fathers"  of  Presi- 
dents and  bureaucratic  government  generally,  such  as 
Russia  and  Prussia  present  to  the  world  to-day. 
Around  "Little  Fathers"  as  Presidents  is  always  gath- 
ered a  bureaucracy.  France,  though  enjoying  repub- 
lican government  in  name,  is  just  as  bureaucratic  as 
many  monarchical  governments  in  Europe.  When  a 
French  peasant  attempts  to  pay  in  money  his  share  in 
the  repair  of  a  communal  road  instead  of  breaking  the 
necessary  amount  of  stone  himself,  no  less  than  twelve 
functionaries  must  approve  of  such  payment  and  no 
less  than  fifty-two  different  acts  must  be  performed 
by  them  before  it  can  be  done.  If  centralization  of 
government  continues  in  state  and  national  govern- 
ment with  the  rapidity  that  we  have  seen  for  the  last 


PROTECTIVE   TARIFFS   AND    PUBLIC    VIRTUE  I37 

twenty-five  years,  it  will  not  be  long  before  all  the 
powers  of  localities  will  have  been  usurped  by  the 
state  government,  while  many  of  the  powers  of  the 
state  will  gradually  be  absorbed  by  the  national  gov- 
ernment. Our  state  will  become  as  that  of  the  Sultan 
of  Turkey,  where  not  a  church  nor  a  school  nor  a 
factory  nor  a  mill  nor  a  village  road  nor  a  bridge  over 
a  river  can  be  built  nor  a  book  or  newspaper  printed 
without  the  examination  of  the  question  at  Constan- 
tinople. Are  the  people  awake  to  these  dangers?  Is 
not  the  remedy  to  find  the  cause  of  such  abuses  and  re- 
move that  cause,  instead  of  making  abuses  and  then 
authorizing  the  President,  through  inter-state  com- 
merce commissions  and  other  means,  to  remedy  the 
abuses  ?  Once  place  in  the  hands  of  the  President  of  the 
United  States  the  power  to  control  every  corporation  in 
this  land,  and  you  have  placed  in  his  hands  a  power  that 
will  surely  destroy  democratic  government.  If  ever  the 
day  shall  arrive  when  the  people  of  the  different  states 
shall  allow  all  their  local  affairs  to  be  administered  by 
state  officials  and  when  the  states  shall  allow  the  pow- 
ers reserved  to  the  states  to  be  exercised  by  the  central 
government,  on  that  day  this  democratic  Republic  will 
be  robbed  of  all  that  has  made  it  of  value  and  interest 
to  mankind. 

The  clearest  expression  of  national  strength  is 
patriotism,  and  protectionism  as  developed  in  the 
United  States  is  destructive  of  patriotism.     The  line 


138  THE   TARIFF    AND   THE   TRUSTS 

between  public  duty  and  private  interests  is  always  lost 
sight  of  in  the  making  of  protective  tariffs.  The 
protective  tariff,  while  it  brings  from  duties  upon 
foreign  imports  upwards  of  $200,000,000  annually  in- 
to the  treasury,  at  the  same  time  permits  the  producers 
of  tariff-protected  articles  to  sell  their  goods  to  the 
American  people  for  at  least  a  billion  dollars  annually 
more  than  they  would  receive  were  it  not  for  the  tariff. 
A  law  whose  chief  effect  is  to  bring  a  billion  dollars  of 
money  into  the  pockets  of  private  individuals  does  not 
inspire  patriotism  in  the  people.  Shoddy  clothing  for 
which  the  citizen  has  to  pay  twice  as  much  at  home  as 
the  Englishman  has  to  pay  for  woolen  clothing,  em- 
balmed beef  sold  by  the  beef  trusts  to  the  government 
for  our  soldiers,  corruption  in  the  general  government 
in  about  all  the  cases  where  recent  investigation  has 
been  made,  increased  taxation  to  support  those  birds 
of  prey,  the  politicians,  the  voting  by  Representatives 
in  Congress  of  mileage  to  their  homes  and  return  dur- 
ing a  constructive  recess  of  Congress  when  they  had 
never  traveled  a  single  mile,  the  sight  of  vast  wealth 
enthroning  itself  in  the  United  States  Senate  and  voting 
tariff  benefits  for  industries  owned  by  its  own  mem- 
bers, all  these  abuses  have  been  tending  to  make  the 
individual  citizen  feel  that  life  is  but  a  scramble  for 
governmental  benefits  and  that  patriotism  is  but  a 
mask  for  hypocrisy.  Are  there  not  evidences  on 
every  side  that  the  spirit  of  patriotism  is  dying  out 


PROTECTIVE   TARIFFS   AND    PUBLIC    VIRTUE         I39 

among  our  people?  It  has  been  found  necessary  for 
the  Legislatures  of  twenty-six  different  states  in  the 
Union  to  prohibit  the  use  of  the  Stars  and  Stripes  as 
a  means  of  advertising  the  commodities  of  merchants 
and  manufacturers,  and  so  fully  have  some  of  our 
courts  absorbed  this  materialism  that  they  regard 
property  as  more  sacred  than  the  flag  of  our  country. 
The  highest  Appellate  Court  in  two  of  the  leading 
states  of  the  Union  has  recently  held  that  the  prohi- 
bition of  such  use  of  the  flag  by  an  act  of  the  state 
Legislature  is  unconstitutional.  In  one  of  the  cases  at 
the  time  the  act  was  passed  the  cigar  manufacturer, 
who  afterwards  became  defendant  in  the  criminal  pro- 
ceedings, had  on  hand  a  few  cigar  boxes  with  the  Stars 
and  Stripes  carried  by  a  military  squad  under  the  title, 
"Color-Bearer,"  printed  thereon.  The  learned  Judges 
in  the  higher  Court  all  agreed  that,  because  the  defend- 
ant was  the  owner  of  these  cigar  boxes  with  this 
label  thereon  at  the  time  the  act  was  passed,  the  por- 
tion of  the  act  applying  thereto  was  unconstitutional  in 
that  it  deprived  him  of  his  property  without  due  process 
of  law.  If  you  wish  a  striking  example  of  the  decay 
of  patriotism  in  our  country,  observe,  when  crossing 
the  Atlantic  on  one  of  our  national  holidays,  the  strug- 
gle of  our  people  to  sing  "America"  or  "The  Star 
Spangled  Banner."  It  was  the  spirit  of  patriotism  in 
the  bosom  of  every  soldier  of  Japan  in  the  late  war 
that  carried  the  Japanese  arms  to  triumph.     It  is  that 


140  THE   TARIFF   AND   THE   TRUSTS 

spirit  largely  that  preserves  the  liberties  of  Switzer- 
land. The  poor  peasants  of  Unterwalden  gave  their 
lives  for  liberty  upon  their  mountains,  the  great  nobles 
of  Venice  clung  to  their  lives  and  to  their  gold. 

Finally,  let  us  inquire  how  protective  tariffs  have 
affected  the  civic  virtue  of  the  beneficiaries  of  the 
tariff.  When  any  man,  be  he  manufacturer  or  in  any 
other  business,  commences  to  sleep  on  a  full  stomach 
stuffed  with  his  neighbor's  share,  at  that  moment  he 
commences  to  die  morally.  This  is  true  of  nations  as 
well  as  individuals.  The  Assyrians  plundered  all 
Asia  Minor  for  seven  hundred  years,  and  brought 
their  wealth  to  Nineveh  only  to  die  through  the  luxury 
purchased  by  their  ill-gotten  gains.  Babylon  followed 
their  example,  and  scientific  men  have  been  digging 
for  the  last  half-century  to  find  the  palaces,  the  hang- 
ing gardens  and  the  great  walls  which  were  built  with 
the  plunder  of  nations.  The  Median  Empire  lived  less 
than  a  century,  and  died  as  a  result  of  its  lust  of  con- 
quest. The  Persian,  Parthian,  and  Roman  Empires 
followed  in  the  footsteps  of  the  others,  and  went  down 
to  destruction  as  the  result  of  the  curse  which  attaches 
to  plundered  wealth.  Spain  robbed  the  Western 
world,  and,  shorn  of  all  her  possessions,  now  lies 
decrepit  and  helpless.  No  man  can  get  from  govern- 
ment what  he  is  not  entitled  to  for  any  considerable 
period  of  time  without  losing  a  sense  of  justice,  if  in- 
deed he  ever  possessed  it.      Do  you  doubt  this  ?     Read 


PROTECTIVE   TARIFFS   AND    PUBLIC    VIRTUE         I4I 

the  testimony  of  the  men  connected  with  the  insurance 
scandals  in  New  York,  about  all  of  whom  are  con- 
nected very  closely  with  the  industries  of  the  country. 
They  do  not  know  evil  when  they  see  it.  They  did  not 
even  seem  to  appreciate  that  a  trustee  could  not  use 
trust  funds  for  his  profit.  Men  cannot  traffic  in  the 
honor  of  other  men  without  losing  their  own  honor. 
Men  cannot  give  money  to  campaign  committees  with 
the  implied  agreement  that  they  shall  receive  a  return 
therefor  through  tariff  legislation  and  keep  their  self- 
respect.  Before  the  Industrial  Commission  on  De- 
cember 18,  1900,  came  George  V.  Cresson,  at  that 
time  President  of  the  Manufacturers'  Club  in  Phil- 
adelphia. Mr.  Cresson  for  forty  years  had  been  en- 
gaged on  a  large  scale  in  the  manufacturing  of  ma- 
chinery and  its  sale  all  over  the  world.  A  careful  ex- 
amination of  his  testimony  indicates  the  elevation  of 
his  character.  Honored  by  the  club  of  which  he  was 
president,  respected  generally  in  business,  a  manu- 
facturer himself,  his  opinion  of  how  protective  tariffs 
are  procured  and  how  they  affect  the  men  who  pro- 
cure them  is  of  value.     He  was  asked : 

"Q.  If  the  tariff  could  be  amended  in  a  few 
"respects  from  time  to  time  as  might  be  suggested 
"by  economic  changes,  without  being  generally  revised, 
"and  if  the  same  policy  of  tariff  could  be  preserved, 
"would  legislation  of  that  sort  injure  business  ? — A.  T 
"understand  you  to  say  that  if  the  changes  were  made 
"gradually  ? 


14-2  THE    TARIFF   AND   THE   TRUSTS 

"Q.  Yes;  from  time  to  time  as  economic  changes 
"suggest  ? — A.  Yes ;  my  opinion  is  that  is  the  only 
"way  to  do  it ;  I  do  not  believe  there  is  any  other  way 
"to  do  it  and  do  it  properly,  I  have  advocated,  and 
"felt  more  and  more  for  years  that  the  sooner  we  get 
"at  that  thing  the  better.  As  I  understand  the  way  the 
"tariff  is  altered  now,  a  large  number  of  manufacturers 
"go  down  to  Washington  and  advocate  their  special, 
"particular  business  and  try  to  get  the  tariff  placed  as 
"high  as  possible  on  it.  I  do  not  think  it  is  of  any 
"advantage  to  them.  I  know  it  would  not  be  in  our 
"business.  As  far  as  we  are  concerned  personally,  we 
"are  not  at  all  affected  by  the  tariff.  You  might  say 
"we  are  affected  indirectly  by  the  way  it  affects  our 
"customers.  For  instance,  the  wool  man,  if  he  has  his 
"business  stopped,  cannot  order  any  of  our  goods ;  the 
"cotton  man  the  same  way,  and  so  on.  Now,  in  case 
"there  is  a  certain  amount  of  leeway  given  that  man 
"to  understand  what  is  going  to  happen,  he  can  pro- 
"vide  a  way  to  arrange  his  business;  but  if  the  thing 
"comes  on  with  a  crash,  it  leaves  him  in  the  air,  so  to 
"speak,  and  he  does  not  know  what  to  do.  That  is  the 
"effect  of  this  incessant  figuring  with  the  tariff  in  a 
"large  way.  I  believe,  as  far  as  I  can  see  the  matter, 
"that  there  have  been  a  great  many  more  changes  in 
"certain  things  in  the  tariff  than  there  has  been  any 
"business  necessity  for.  I  am  not  at  all  an  advocate 
"of  a  high  tariff.     I  think  that  as  low  a  tariff  as  we 


PROTECTIVE   TARIFFS   AND    PUBLIC    VIRTUE         I43 

"can  get  along  with,  affording  a  fair  profit,  is  what  the 
"manufacturers  of  this  country  will  prosper  under. 

"Q.  You  believe  in  having  it  protective,  but  not  un- 
"duly  protective? — A.  No;  I  do  not  believe  anybody 
"should  have  the  advantage  in  that  way.  It  creates  a 
"bad  condition  of  affairs  in  regard  to  the  enormous 
"amount  of  money  a  man  makes  at  one  time,  and  when 
"that  is  all  cut  off  he  has  been  demoralized  by  that 
"operation.  He  gets  in  the  habit  of  spending  more 
"money  than  he  did  and  than  he  ought  to,  and  is  apt  to 
"lose  his  business  entirely.  I  have  known  of  many  in- 
"stances  of  it.  I  have  seen  it  in  this  club ;  where  men 
"used  to  spend  thousands  of  dollars  they  cannot  now 
"spend  so  many  pennies.  A  good  many  have  left  here 
"because  of  their  being  absolutely  without  means. 
"Some  of  the  principal  men  here  when  I  first  came  to 
"this  club  have  suffered  in  that  way,  and  I  mention 
"this  simply  as  being  a  typical  place  where  we  see  the 
"different  kinds  of  manufacturers. 

"Q.  (By  Mr.  Farquhar.)  Do  you  know  of  any 
"way  of  amending  the  tariff  without  opening  the  whole 
"tariff  schedule? — A.  The  only  way  I  could  answer 
"that  question  would  be  this :  If  I  find  a  part  of  my 
"business  does  not  pay,  I  make  it  pay.  If  there  is  too 
"much  tariff  on  one  thing,  why  not  have  it  changed  so 
"as  to  be  within  bounds  and  be  reasonable? 

"Q.  But  do  you  not  know  the  whole  tariff  is  sub- 
"ject  to  amendment  the  minute  you  take  it  up  to  amend 


144  THE    TARIFF    AND   THE   TRUSTS 

"one  paragraph? — A.  That  is  a  legal  point  I  do  not 
"know  anything  about,  but  I  think  it  is  a  very  bad 
"thing  if  it  is  so. 

"Q.  Your  opinion  is  that  we  should  take  the  whole 
"tariff  question  out  of  politics? — A.  I  think  it  should 
"be  made  a  business  question, 

"Q.  You  would  place  it  in  such  a  body  as  the 
"British  Board  of  Trade,  where  they  could  make 
"changes  to  fit  conditions? — A.  The  British  have  al- 
"ways  had  the  advantage  over  us  in  that  way." 

Mr.  Cresson,  with  ripe  experience  and  wide  obser- 
vation of  men,  seems  to  think  that  protective  tariffs 
ruin  men,  and  he  tells  us  he  has  known  many  instances 
of  that  kind.  Every  man  of  business  knows  such  in- 
stances. The  moral  law  of  the  universe  is  against  in- 
justice, and  the  luxury  which  ill-gotten  wealth  affords 
more  often  brings  woe  than  happiness.  All  history 
verifies  this.  Sybaris,  Rome,  Antioch,  and  Venice, 
each  are  instances  where  wealth  and  luxury  destroyed 
private  and  public  virtue.  We  all  recall  the  fate  of 
that  little  group  of  Italian  States  whose  political  in- 
stitutions were  w-recked  by  the  greed  of  a  few  men, 
and  whose  public  freedom  vanished  before  the  breath 
of  commercial  ambitions  on  the  part  of  their  petty 
rulers.  The  effect  of  acquiring  wealth  by  injustice  is 
seen  in  the  men  at  the  head  of  our  great  commercial 
combinations.  Do  they  take  an  interest  in  public 
affairs?     Are  they  willing  to  make  sacrifices  for  the 


PROTECTIVE   TARIFFS   AND    PUBLIC    VIRTUE         I45 

public  welfare?  In  England  men  in  the  same  walks 
of  life  frequently  give  years  of  time  to  Parliament  and 
public  life  without  receiving  a  dollar  of  recompense 
for  their  services.  Here  this  class  of  men  avoid  public 
life  except  to  procure  unjust  laws  allowing  them  to 
fleece  their  fellow-countrymen.  But  they  do  make 
what  they  regard  as  atonement  for  such  conduct. 
They  give  freely  to  charitable  purposes.  The  sense  of 
religious  rapture  over  mercies  received  on  the  stock 
exchange  are  said  to  bring  many  offerings  of  great 
beauty  to  the  altar,  and  the  sense  of  thankfulness  for 
unjust  enrichment  seems  to  result  in  a  flood  of  chari- 
table gifts.  If  history  has  any  lesson  clearly  written,  it 
is  that  the  rapid  accumulation  of  wealth  through  in- 
justice is  always  accompanied  by  a  generous  distribu- 
tion of  the  same  to  the  poor.  The  reign  of  Augustus 
and  the  reign  of  Constantine  were  marked  with  just 
such  liberality  as  exists  to-day.  But  Augustus  found 
Rome  free  and  left  it  a  slave.  In  the  reign  of  Con- 
stantine commenced  that  distribution  of  wealth  which 
transferred  to  monasteries  and  churches  a  considerable 
proportion  of  the  riches  of  the  world.  The  greater 
part  of  the  works  of  charity  have  been  a  curse  to  those 
receiving  the  alleged  benefits.  What  we  need  is  not 
charity  but  justice.  Justice  is  the  highest  charity,  for 
it  substitutes  equal  opportunity,  fair  play  and  certainty 
for  the  chance  operation  of  philanthropy. 

There  are,  however,  indications  of  a  better  day.     Be- 
10 


146  THE    TARIFF    AND   THE   TRUSTS 

fore  the  Civil  War  the  question  of  the  existence  of 
slavery  and  its  injustice  was  one  avoided  by  Southern 
members  of  the  Senate  and  the  House  of  Representa- 
tives. Human  slavery  was  so  thoroughly  inconsistent 
with  our  form  of  government  as  to  make  mention 
thereof  a  source  of  pain,  and  so  members  of  Congress 
from  the  North  as  well  as  the  South  were  silent.  The 
cruel  injustice  of  the  trusts  to  consumers  has  created  a 
tender  spot  in  the  conscience  of  every  protectionist  in 
Congress.  He  does  not  like  to  discuss  the  question. 
When  the  bill  to  remove  duties  upon  imports  of  build- 
ing material  for  San  Francisco  was  recently  before  the 
House  of  Representatives  it  was  passed  with  little  dis- 
cussion, because  protectionists  feared  a  tariff  debate, 
and  the  dread  of  the  striking  object-lesson  which  must 
result  from  such  legislation.  These  men  admit  the 
weakness  of  their  case  by  the  fear  of  discussion.  When 
an  evil  gets  so  bad  that  men  dare  not  discuss  it  the 
end  is  approaching.  In  the  Hall  of  Eblis  every  man 
ran  round  and  round  holding  his  hand  over  an  incur- 
able sore  and  all  agreeing  not  to  mention  it.  Will  the 
people  consent  that  it  shall  not  be  mentioned  ?  Are 
tliey  going  to  be  cheated  much  farther  with  the  empty 
forms  of  liberty  when  the  spirit  has  fled.  The  event  is 
with  them.  If  their  virtue  is  impaired,  the  result  hangs 
trembling  in  the  balance.  Those  who  live  under  a 
representative  form  of  government  must  rise  morally 
or    they    will    sink    politically.     We    cannot    measure 


PROTECTIVE   TARIFFS    AND    PUBLIC    VIRTUE         I47 

justice  by  expediency,  we  cannot  sell  our  souls  to 
materialism,  we  cannot  fold  our  arms  in  sleep  and  sur- 
render to  the  greed  of  unscrupulous  wealth  and  still 
preserve  free  government  in  its  integrity.  We  may 
give  credent  ear  to  the  flattery  of  demagogues,  we  may 
console  ourselves  with  the  hope  that  things  are  not  as 
bad  as  they  really  seem,  we  may  deceive  ourselves  with 
the  forms  of  free  government  long  after  the  spirit  of 
liberty  has  fled ;  but  if  we  are  to  preserve  free  govern- 
ment and  to  act  worthily  of  those  who  laid  its  founda- 
tions in  prayers  and  in  blood,  we  must  emulate  them 
in  their  hatred  of  injustice  and  extortion. 


CHAPTER  V 

A   TALK    WITH    MANUFACTURERS 

It  will  take  men  a  weary  while  to  believe  in  the  in- 
justice of  any  system  that  puts  gold  into  their  purses. 
Because  of  this  I  do  not  address  myself  to  the  owners 
of  the  United  States  Steel  Corporation,  nor  to  the 
other  monopolies  which  control  the  supply  of  raw 
material,  but  rather  to  you,  tens  of  thousands  of  manu- 
facturers, who  use  in  your  factories  raw  material,  such 
as  pig  iron,  steel  blooms,  billets,  coal,  wool,  hides, 
leather,  lumber,  lead,  or  chemicals.  If  I  can  satisfy 
you  that  the  tariff  not  only  puts  no  gold  into  your 
purses,  but  actually  takes  it  out,  you  surely  cannot  say 
that  in  denouncing  our  existing  tariff  I  am  opposing 
your  interests. 

Never  in  the  history  of  our  country  has  there  been 
a  time  so  critical  for  manufacturers  and  exporters  as 
the  present.  Upon  our  action  for  the  next  twenty 
years  as  regards  the  imposition  of  duties  on  raw  ma- 
terials depends  our  ability  to  seize  the  greatest  op- 
portunity ever  presented  to  any  people  for  industrial 
primacy.  Let  me  call  your  attention  to  the  existing 
conditions.     Our  country  is   situate  midway  between 

148 


A   TALK    WITH    MANUFACTURERS  I49 

Europe  and  eastern  Asia.  Japan  holds  aloft  the  light 
which  is  to  guide  China,  Corea,  Manchuria  and  the 
islands  of  the  Pacific  and  Indian  Oceans  to  a  higher 
civilization.  Japan,  China  and  all  the  Eastern  coun- 
tries have  unlimited  deposits  of  the  raw  material  of 
manufacturing.  Can  there  be  any  doubt  about  the 
wisdom  of  exchanging  our  highly  manufactured  arti- 
cles, made  in  great  part  by  automatic  machinery,  for 
the  raw  materials  and  hand-made  products  of  Asia? 
Such  an  exchange  means  more  work  for  our  people  al- 
ready becoming  overcrowded.  Such  a  vent  for  our 
manufactured  product  will  give  stability  to  our  manu- 
factures which  they  do  not  now  possess.  I  am  aware 
that  the  imports  to  China  and  the  islands  of  the  Pacific 
are  now  comparatively  small,  and  our  trade  with  them 
when  compared  with  European  countries  is  really  in- 
significant ;  but  within  the  next  fifty  years  a  revolu- 
tion in  their  industrial  life  must  take  place.  Railroads 
will  be  built,  mines  will  be  opened,  waterways  will  be 
improved,  European  customs  will  be  adopted  and  com- 
merce between  these  countries  and  the  existing  in- 
dustrial world  will  multiply  many  fold.  Our  vast 
natural  resources  of  iron  and  other  raw  materials 
which  are  the  foundation  of  successful  industry,  and 
without  which  it  cannot  long  continue,  are  the  great- 
est of  any  country  in  the  world.  We  produce  more 
coal,  iron  ore,  pig  iron,  steel,  copper,  lead,  borax, 
petroleum,  cotton,  wheat,  corn,  oats,  and  cattle  than 


150  THE    TARIFF    AND    THE    TRUSTS 

any  other  people  in  the  world.  Our  people  are  the 
most  energetic  in  the  world,  using  machinery  in  manu- 
facturing to  an  extent  elsewhere  unknown.  Our 
manufacturers  are  able  to  adjust  themselves  to  new 
conditions  more  easily  than  any  in  the  world.  No 
people  have  ever  carried  on  such  gigantic  schemes  of 
internal  commerce  and  transportation  as  ours.  Our 
workmen  are  free  from  the  routine  spirit  common  to 
European  workmen  and  have  no  prejudices  against 
the  employment  of  machinery  so  common  in  Eng- 
land. Our  capitalists  are  the  boldest  and  most  enter- 
prising, and  we  are  and  will  continue  to  be  the  most 
inventive  people  in  the  world.  Edison  leads  all  the 
inventors  of  the  world,  having  given  us  784  patents 
up  to  1904.  The  people  of  the  little  State  of  Connecti- 
cut probably  have  made  more  inventions  than  the  peo- 
ple of  all  Russia. 

Now  what  prevents  our  taking  the  leadership  as  ex- 
porters? It  is  our  antiquated  tariff,  which  for  forty 
years  has  imposed  a  higher  duty  upon  imports  than 
that  of  any  other  country  in  the  world.  It  is  so  un- 
scientific in  its  nature  as  to  impose  duties  upon  coal, 
iron  ore,  pig  iron,  steel,  wool,  lead,  sugar,  lumber, 
hides,  wood-pulp,  chemicals,  and  about  every  other  raw 
material  which  you  manufacturers  use.  In  such  a 
contest  as  you  are  about  to  undertake  every  burden  up- 
on your  raw  material  should  be  removed.  Your  com- 
petitors in  Great  Britain  and  Germany  have  consider- 


A    TALK    WITH    MANUFACTURERS  I5I 

able  advantage  of  you  in  the  cheapness  of  their  machin- 
ery and  plants,  and  every  particle  of  raw  material 
which  goes  into  their  manufactured  product  is  abso- 
lutely free  from  any  burden.  You  would  be  able,  by 
your  energy  and  your  use  of  machinery,  to  lead  the 
world  in  manufacturing  in  a  fair  contest,  but  we  put 
burdens  upon  every  particle  of  your  raw  material  and 
ask  you,  thus  handicapped,  to  capture  the  markets  of 
the  world.  Our  protective  tariff  simply  penalizes  all 
production  and  all  exportation  by  imposing  duties  up- 
on raw  materials.  Thousands  of  you,  employing 
hundreds  of  thousands  of  v/orkmen,  are  engaged  in 
building  locomotives,  cars,  carriages,  hydraulic  ma- 
chinery, dynamos,  automobiles,  agricultural  ma- 
chinery, and  other  machines  and  tools,  and  every- 
thing that  enters  into  the  manufacture  of  your 
product  is  increased  in  cost  by  nearly  the  amount 
of  the  duty  on  your  raw  material.  You  can  manu- 
facture in  eight  months  sufficient  to  satisfy  the  wants 
of  our  people,  and  you  must  either  over-produce  and 
bring  about  stagnation  or  else  find  other  markets  in 
which  to  sell  your  products.  The  obstacles  to  your 
success  is  that  every  stick  of  timber  in  the  building  of 
your  plant,  every  piece  of  your  machinery,  every  ton  of 
coal,  every  piece  of  iron  or  steel  or  lead  you  use  is  in- 
creased in  price  because  of  the  tariff.  More  than  a 
third  of  all  our  imports  is  raw  material,  and  the  duty 
imposed  not  only  aft'ects  the  price  of  these  imported 


152  THE   TARIFF    AND   THE    TRUSTS 

articles  but,  as  you  well  know,  enables  the  trust,  after 
it  has  destroyed  domestic  competition,  to  raise  the 
price  of  the  like  domestic  raw  material  up  to  the  duty 
line.  There  is  annually  a  tax  of  at  least  $600,000,000 
upon  your  raw  materials  through  the  agency  of  the 
tariff.  Do  away  with  this  tax,  and  by  the  aid  of  your 
machinery  and  your  intelligent  labor  you  could  man- 
ufacture so  cheaply  that  you  could  wrest  from  Great 
Britain  and  Germany  the  neutral  markets  of  the  world. 
While  you  practice  economy  of  effort  in  all  the  daily 
actions  of  your  industrial  life,  buying  as  cheaply  as 
possible,  saving  a  dollar  here  and  a  dollar  there,  you 
allow  a  system  to  continue  which  makes  your  economy 
of  little  avail  when  you  seek  to  become  a  producer  for 
the  world.  Not  only  do  these  iron  masters  make  you 
pay  tribute  upon  every  ton  of  your  raw  material,  but 
they  dump  their  pig  iron,  crude  steel,  and  partially 
manufactured  products  into  foreign  markets  at  lower 
prices  than  they  sell  to  you,  and  the  Englishman  and 
German,  getting  their  raw  material  at  reduced  prices, 
can  undersell  you  in  the  markets  of  the  world.  It  is 
sound  public  policy  to  send  abroad  highly  manufactured 
goods,  since  thereby  you  exchange  the  products  of 
skilled  labor  for  the  cheap  labor  used  in  procuring  your 
raw  material.  Do  not  public  policy  and  justice  re- 
quire that  the  men  who  control  the  United  States  Steel 
Corporation,  the  Sole  Leather  Trust,  the  Lead  Trust, 
the  chemicals  and  the  fibrous  matter  of  vour  manu- 


A   TALK    WITH    MANUFACTURERS  153 

factures,  should  sell  their  products  to  you  at  the  same 
prices  for  which  they  sell  them  in  European  countries 
and  allow  you  to  compete  fairly  with  the  foreigner 
rather  than  to  give  him  the  unfair  advantage  of  lower 
cost  of  raw  material  ?  The  trusts  are  simply  discrim- 
inating against  their  home  manufacturers  whenever 
they  sell  their  products  abroad  at  lower  prices  than 
they  sell  them  at  home.  How  can  you  compete  in  the 
markets  of  China  and  the  East  or  in  the  markets  of 
South  America  with  the  manufacturers  of  Great 
Britain  and  Germany  when  they  build  their  plants  from 
untaxed  lumber,  dye  their  clothes  with  untaxed  dyes, 
create  their  steam  from  untaxed  coal,  make  their 
hardware  and  tools  from  untaxed  pig  iron,  and  make 
their  cloth  from  untaxed  wool? 

Duties  imposed  upon  raw  materials  restrict  your 
choice  of  materials  and  therefore  injure  you  in  ad- 
justing your  manufacturing  to  the  demands  of  foreign 
markets.  To  be  successful  you  need  free  scope  in 
your  choice.  Again,  a  tax  on  coal  means  a  tax  on 
steam  and  indirectly  a  tax  on  iron,  since  it  takes  a 
considerable  amount  of  coal  to  make  a  ton  of  iron. 
A  tax  on  iron  means  a  tax  on  machinery,  railways, 
buildings,  and  tools ;  and  the  effect  of  all  these  multiple 
taxes  measured  in  the  finished  products  and  of  the 
profits  upon  them  at  each  stage  can  only  be  imagined, 
they  cannot  be  measured.  You  will  understand  what 
I  mean  by  raw  material.     In  strict  sense  there  is  no 


154  THE    TARIFF   AND   THE    TRUSTS 

such  thing  as  raw  material.  The  finished  product  of 
one  producer  is  the  raw  material  of  the  other,  and  the 
greater  number  of  hands  through  which  it  passes  the 
more  costly  it  becomes  to  you.  The  tax  accumulates 
in  the  successive  stages,  and  each  person  through 
whose  hands  it  goes  takes  his  profits  on  its  value  in- 
creased by  the  duty.  By  the  time  it  reaches  you  it 
has  become  so  high  that  both  you  and  your  laborers 
must  suffer  by  the  decreased  profits  that  come  from 
costly  raw  material.  All  the  manufacturing  countries 
of  Europe  depending  to  any  extent  upon  exporting 
have  recognized  the  wisdom  of  putting  raw  materials 
upon  the  free  list.  In  Germany's  recent  tariff  you 
will  find  the  raw  materials  about  which  I  have  spoken 
on  the  free  list,  and  competition  with  her  exporters, 
or  competition  in  their  own  markets  cannot  be  carried 
on  by  our  people  unless  we  also  recognize  that  the  raw 
materials  of  manufacturing  ought  to  be  obtained  as 
cheaply   as  possible. 

The  ablest  of  our  own  manufacturers  and  of  the 
manufacturers  abroad  appreciate  this  principle.  Let 
me  give  you  a  few  illustrations.  John  B.  Sargent,  of 
New  Haven,  is  the  head  of  a  firm  carrying  on  one 
of  the  largest  manufactories  of  hardware  in  the  world. 
Probably  no  man  connected  with  manufacturing  in 
our  country  has  traveled  more  widely  or  studied 
economic  questions  more  carefully  than  Mr.  Sargent. 
Speaking  of  the   matter   of  cheap   raw   materials   in 


A    TALK    WITH    MANUFACTURERS  155 

1894,  he  said:  "We  export  to  Australian,  South  Afri- 
"can,  and  South  American  countries,  as  well  as  to  our 
"nearer  neighbors,  any  goods  that  we  manufacture 
"in  good  quantities  in  zvhich  labor  is  a  large  element 
''of  cost  and  protected  materials  a  small  element  of 
"cost.  For  instance,  we  supply  those  countries  quite 
"largely,  certainly  averaging  fully  half  they  use,  with 
"carpenters'  tools  of  good  quality  and  finish,  such 
"as  polished  chisels  of  all  styles,  auger  and  auger 
"bits  and  other  boring  tools ;  with  iron  planes,  drawing 
"knives,  etc. ;  with  nearly  all  the  axes  they  use ;  all  car- 
"penters'  hammers ;  machinists'  hammers,  blacksmiths' 
"fine  finished  hand  hammers,  etc.,  the  forging  and  finish 
"of  which  is  a  large  proportion  of  the  cost  and  the 
"tariflf-taxed  steel  a  small  part  of  the  cost.  But  we  can- 
"not  export  a  sledge  hammer,  nor  an  anvil,  nor  a  heavy 
"iron  chain.  And  what  is  worse,  by  not  being  able 
"to  furnish  the  coarsely  made  and  heavy  goods,  we 
"thereby  fail  in  many  cases  to  secure  orders  for  the 
"higher  grade  goods.  .  .  .  We  supply  Australian 
"countries  with  nearly  all  their  better  grade  of  stoves 
"with  smooth  castings  and  well  finished  with  nickel 
"plated  trimmings,  but  they  all  get  their  coarsely  cast 
"and  heavy  stoves  with  little  finish  from  England." 
Mr,  Sargent  goes  on  to  enumerate  many  other  articles 
requiring  highly  skilled  and  highly  paid  labor  but 
small  amounts  of  steel  and  iron  which  are  exported 
by  his  and  other  firms.     But  in  all   products   where 


156  THE   TARIFF    AND   THE    TRUSTS 

much  iron  and  steel  is  used  they  were  unable  to  com- 
pete with  foreign  countries  because  of  the  high  price 
of  their  raw  material.  Mr.  Sargent  says :  "Our  labor 
is  really  the  cheapest  in  the  world,  because  now,  as 
then,  it  is  paid  more;  but  it  produces  more,  so  that 
the  labor  cost  of  production  is  less  here  than  in  foreign 
countries.  Indeed,  the  articles  which  we  most  excel 
in  producing  are  those  in  which  the  proportion  of 
labor  is  comparatively  large  and  material  small,  like 
machinery  and  shelf  hardware ;  while  we  find  it  harder 
to  compete  with  articles  requiring  less  labor  and  more 
materials  like  anvils." 

Mr.  A.  B.  Farquhar,  President  of  the  A.  B. 
Farquhar  Company,  Limited,  manufacturers  and  ex- 
porters of  agricultural  machinery,  York,  Pennsyl- 
vania, in  a  letter  addressed  to  the  Ways  and  Means 
Committee  of  the  House  of  Representatives  in  1897, 
says:  "Some  years  ago  I  visited  a  large  agricultural 
implement  factory  in  England  at  the  invitation  of  its 
owner,  a  member  of  Parliament.  I  found  plow 
handles  and  beams  produced  in  that  factory  at  a  labor 
cost  of  more  than  a  dollar,  while  similar  work  cost  us 
but  10  cents  in  our  factory  in  York,  owing  to  our 
superior  machinery  and  methods.  So  that  our  cheap- 
er labor  at  considerably  higher  wages  fully  made  up 
for  the  disadvantages  at  which  we  were  put  by  the 
greater  cost  of  raw  material.  I  then  and  there  told 
the  proprietor  that  the  trade  would  all  come  to  us  un- 


A   TALK    WITH    MANUFACTURERS  157 

less  he  improved  his  methods ;  and,  to  make  a  long 
story  short,  it  has  all  come  to  us." 

We  impose  duties  amounting  to  about  52  per  cent, 
upon  wool,  and  then,  to  compensate  for  this  duty  and 
to  give  additional  protection  to  the  manufacturers  of 
woolen  goods,  we  impose  a  duty  of  about  100  per 
cent,  upon  the  finished  product.  No  other  country  in 
the  world  to-day,  so  far  as  I  can  ascertain,  imposes 
duties  upon  wool.  We  alone  of  all  the  people  are 
willing  to  confine  our  manufactured  woolen  goods  to 
our  own  country  by  putting  such  a  duty  upon  the  raw 
material  as  makes  it  impossible  for  us  to  export  in  any 
considerable  amount.  Exports  of  manufactures  of 
wool  from  the  United  States  in  the  calendar  year  1903 
were  only  $2,002,913  in  value.  The  exports  from 
Great  Britain  during  the  same  twelve  months  were 
valued  at  $123,544,847.  The  contrast  between  these 
two  amounts  affords  a  striking  commentary  on  the  im- 
potence of  the  United  States  and  the  eminence  of 
Great  Britain  in  the  foreign  markets  as  the  result  of 
the  pursuit  of  two  diametrically  opposite  tariff  policies. 
But  this  is  not  the  worst.  Our  manufacturers  of  car- 
pets have  shown  wonderful  ability  in  conceiving  beau- 
tiful designs,  and  our  inventors  have  given  us  the  best 
looms  and  other  machinery  for  their  manufacture 
known  in  the  world.  We  do  not  produce  carpet  wools. 
They  come  largely  from  Australia  and  South  America 
and    some    European    and    Asiatic    countries.     The 


158  THE    TARIFF    AND   THE    TRUSTS 

Dingley  Law  imposed  4  cents  per  pound  on  carpet 
wools  costing  less  than  12  cents,  and  7  cents  per 
pound  on  carpet  wools  costing  more  than  12  cents. 
The  exportation  of  carpets  has  steadily  decreased 
since  the  passage  of  that  bill. 

It  is  said  by  experts  that  the  building  of  a  cotton  mill 
with  100,000  spindles  in  the  United  States  costs 
$1,250,000;  but  in  England,  because  of  the  cheapness 
of  raw  material,  only  one-half  the  sum.  You  who 
manufacture  unbleached  cloths  can  compete  with  the 
world  because  you  get  your  raw  materials  free;  but 
when  you  come  to  prints,  lawns,  and  ginghams,  the 
contest  is  harder,  because  the  dyes  and  other  chemicals 
which  you  use  are  increased  in  price  by  the  tariff,  and 
you  are  more  or  less  handicapped  thereby  in  competi- 
tion abroad. 

We  are  the  greatest  producers  of  lead  in  the  world, 
and  the  lead  trust  for  some  years  has  been  selling  its 
lead  in  London  for  a  dollar  less  per  hundred  pounds 
than  in  New  York,  yet  lead  enters  into  the  manufacture 
of  glass,  lamp  chimneys,  and  many  other  branches  of 
manufacturing  and  building.  In  other  branches  we 
use  borax,  linseed  oil,  white  lead,  and  hundreds  of 
chemicals,  yet  our  government,  by  high  tariffs,  allows 
men  like  the  late  William  Whiteman,  of  Philadelphia, 
and  a  firm  in  St.  Louis,  and  another  in  New  York,  to 
form  combinations  and  mulct  you  to  the  amount  of  at 
least  fifty  per  cent,  of  the  cost  price  for  dye  stuffs  and 


A    TALK    WITH    MANUFACTURERS  159 

almost  every  kind  of   chemical   used   in  your  manu- 
facturing. 

We  have  in  this  country  upwards  of  ten  thousand 
flour  mills  in  thirty  leading  milling  states.  Minne- 
sota ranks  first  in  the  list  of  milling  states,  considerably 
upwards  of  a  hundred  million  bushels  of  wheat  being 
turned  into  flour  in  that  state  in  a  year.  We  are  the 
greatest  exporters  of  flour  in  the  world,  and  but  for 
our  exports  of  flour,  grain,  and  wheat  we  would  cut  a 
sorry  figure  in  the  exporting  world.  The  business  of 
manufacturing  flour  from  wheat  could  be  extended 
almost  indefinitely  in  the  state  of  [Minnesota.  Now 
let  us  see  what  the  tariff,  by  imposing  heavy  duties  on 
the  imports  of  other  countries,  does  to  encourage  mill- 
ing. Belgium,  Holland,  France,  and  Germany  have 
retaliated  and  imposed  either  prohibitory  or  excessive- 
ly high  duties  upon  the  imports  of  our  flour.  For 
years  v/e  have  paid  the  maximum  tarifif  duty  in  France. 
This  is  not  all,  the  cost  of  the  miller's  plant  and  ma- 
chinery is  greatly  enhanced  by  the  duties  upon  lumber 
and  iron.  By  imposing  a  duty  of  25  cents  a  bushel  up- 
on the  imports  of  wheat  we  have  shut  out  from  the 
great  flouring  mills  of  Minnesota  the  vast  wheat  supply 
of  Manitoba,  Saskatchewan,  Assiniboia,  and  Alberta, 
for  the  American  railways  cannot  bring  it  to  Minne- 
apolis for  the  millers  to  grind  because  of  the  difficulty 
to  trace  it  in  bond  and  so  obtain  the  rebates.  The  re- 
sult will  be  that  American  millers  bv  the  hundreds  will 


l60  THE   TARIFF    AND   THE   TRUSTS 

eventually  establish  their  mills  in  Canada  unless  this 
unreasonable  duty  is  removed.  The  duty  does  not 
benefit  the  American  farmer  a  farthing,  for  he  is  the 
greatest  exporter  of  wheat  in  the  world,  and  the  duty  is 
imposed  only  to  allow  unscrupulous  demagogues  to 
deceive  him  with  the  statement  that  his  products  are 
highly  protected. 

The  Canadian  Dominion  extends  nearly  4,000  miles 
along  our  northern  border.  On  both  sides  of  this  line 
are  English-speaking  people  who,  except  in  Quebec, 
enjoy  the  same  English  Common  Law  and  have  the 
same  traditions,  history,  and  aspirations.  Our  great 
prosperity  has  come  from  the  fact  that  through  three 
million  and  a  half  square  miles  of  territory  the  people 
of  over  fifty  states  and  territories  can  exchange  their 
commodities  with  perfect  freedom  and  to  their  mutual 
benefit.  Yet,  in  face  of  this  fact,  we  have  erected  an 
artificial  barrier  to  all  trade  with  the  Canadians,  and 
that,  too,  to  our  own  detriment.  The  Dominion  of 
Canada  has  an  unbroken  stretch  of  white  pine  and 
spruce  extending  from  the  east  of  Labrador  to  the 
Pacific  Ocean.  But  our  great  statesmen  stimulate 
the  destruction  of  the  American  forests  by  protection 
upon  lumber  and  wood-pulp  and  hasten  the  day  when 
the  last  white  pine  tree  shall  be  cut  and  the  last  spruce 
tree  be  ground  into  wood-pulp.  The  industries  of  our 
New  England  people  are  languishing.  Within  the 
New  England  states  there  are  no  considerable  deposits 


A   TALK    WITH    MANUFACTURERS  l6l 

of  iron  and  no  deposits  of  coal.  Close  by,  in  Nova 
Scotia  and  in  other  Canadian  provinces,  are  vast  sup- 
plies of  iron  and  coal,  of  easy  access  from  the  seashore 
and  within  the  radius  of  cheap  transportation  to  Port- 
land and  Boston.  Yet  this  great  body  of  people,  clam- 
oring for  [ree  coal  and  free  iron  ore,  are  denied  the 
right  to  procure  these  raw  materials  to  facilitate  their 
manufacturing. 

After  twenty-five  years  of  free  hides  the  Dingley 
Tariff  imposed  a  duty  of  15  per  cent,  upon  cattle  hides. 
This  duty  was  imposed  despite  the  protests  of  the 
boot  and  shoe  manufacturers.  Its  only  value  is  to 
the  great  meat  trust  which  purchases  its  stock  on  the 
basis  of  meats  and  not  of  hides.  In  connection  with 
this  duty  a  duty  of  20  per  cent,  is  imposed  upon  im- 
ported sole  leather,  and  these  two  duties  not  only  put 
an  increased  price  upon  every  pair  of  boots  and  shoes, 
but  an  increased  price  upon  every  piece  of  leather  used 
by  saddlers  and  manufacturers.  The  sole  leather  in- 
dustry is  controlled  by  a  trust.  It  is  understood  that 
the  promoters  of  this  trust  are  connected  with  the 
cattle-slaughtering  interests,  and  have  been  for  some 
time  getting  control  of  the  tanneries  and  leather-pro- 
ducing industries  of  the  country.  Our  boot  and  shoe 
industry  employs  the  most  intelligent  labor  with  the 
best  results  of  any  manufacturing  business  in  the 
United  States.  This  business  is  the  best  evidence  which 
the  United  States  presents  to  the  world  to-day  of  the 
II 


l62  THE    TARIFF    AND   THE   TRUSTS 

advantage  of  labor-saving  machinery  and  of  the  ex- 
treme  specialization  or  subdivision  of  labor.     With- 
out these  duties  we  could  manufacture  the  boots  and 
shoes  of  the  world,  because  we  use  the  most  efficient 
machinery  in  their  manufacture.     Mr.  John  T.  Day, 
editor  of  the  Shoe  and  Leather  Record  in  England, 
who  recently  wrote  an  article  upon  the  boot  and  shoe 
trade  of  England  for  a  volume  entitled  "British  Indus- 
tries Under  Free  Trade,"  says  that  the  revolution  in 
the  making  of  shoes  was  brought  about  by  the  McKay 
Sole-Sewer,  and  that  the  result  of  this  invention  turned 
every    Yankee    inventor's    attention    to    shoe-making 
machinery  as  the  easiest  way   to   fame  and   fortune. 
Mr.  Day  says :  "In  a  brief  sketch  it  is  impossible  to 
'enter  far  into  detail,  though  much  of  it  would  be  both 
'interesting  and  instructive.     It  is  enough  to  say  that 
'the  play  of  circumstances  brought  it  to  pass  that  by 
'1890,  or  perhaps  a  little  earlier,  the  factories  of  the 
'Eastern  states  were  so   much  better  equipped  than 
'ours  that  the  American  boot  manufacturer  had  the 
'British  market  at  his  mercy,  but  he  did  not  know 
'it.     Until   about    1894    the   American    manufacturer 
'held   very   strongly    to   the  view    that   he    was  only 
'able    to    keep    his    domestic    market    to    himself   by 
'maintaining    a   high   tariff.     When   it    was   imposed 
'he   was  told  that   it  was   for  the  purpose  of  keep- 
'ing  out  the  products  of  the  'pauper  labor  of  Europe.' 
'He  was  quite  curiously  unaware  that  in  the  course  of 


A   TALK    WITH    MANUFACTURERS  I63 

"about  thirty  years  he  had  so  improved  his  methods 
"of  manufacture  that  his  productive  labor  was  costing 
"him  in  some  cases  less  per  dozen  by  fifty  per  cent, 
"than  it  was  costing  the  British  shoe  manufacturer  for 
"the  same  work.  And  yet  the  American  boot  operative 
"was  earning  £3  a  week,  against  30s.  for  a  similar  man 
"in  Leicester  or  Northampton.  And  in  the  case  of 
"female  labor  the  disparity  was  even  more  marked. 
"I  give  these  figures  broadly  as  the  result  of  a  most 
"careful  personal  investigation  which  I  made  in  1891 
"when  I  visited  the  United  States  for  the  express  pur- 
"pose  of  investigating  labor  cost  in  American  shoe 
"factories."  The  men  who  by  protective  tariffs  upon 
raw  materials  cripple  such  industries  as  the  making 
of  boots  and  shoes  in  this  country  know  as  much 
about  economic  science  as  a  gorilla  knows  about  a 
steam  engine.  Here  is  an  industry  which  has  never 
been  controlled  by  a  trust  and  which  can  supply  the 
world  with  boots  and  shoes.  The  average  price  of 
labor  in  this  industry  is  the  highest  of  any  industry  in 
Massachusetts.  The  operatives  are,  I  am  told,  of  the 
highest  average  intelligence  found  in  any  industry  in 
the  United  States.  It  is  an  exporting  industry  which 
cannot  be  aided  by  a  protective  tariff  without  the  ex- 
istence of  a  trust,  yet  Congress  imposes  a  duty  upon 
hides  and  sole  leather,  and  puts  just  that  much  more 
burden  upon  its  ability  to  export  its  products. 

The  French  Republic  in  1892  passed  a  tariff  with 


164  THE   TARIFF   AND   THE   TRUSTS 

maximum  and  minimum  duties.  The  part  of  the  tariff 
with  maximum  duties  is  known  as  the  general  tariff, 
and  the  part  with  the  minimum  duties  is  known  as  the 
conventional  tariff.  Upon  654  items  of  our  exports 
to  France  maximum  duties  were  being  paid.  Upon 
705  articles  exported  to  us  by  the  French  our  Dingley 
Tariff  imposed  duties  much  higher  even  than  the  max- 
imum duties  imposed  upon  our  exports  to  France. 
President  McKinley  appointed  the  Hon.  John  A.  Kas- 
son,  who  had  previously  been  upon  the  Ways  and  Means 
Committee  in  the  House  of  Representatives  and  who 
had  a  large  acquaintance  with  the  facts  concerning 
our  exports  and  imports,  to  negotiate  a  reciprocal  treaty 
with  France.  The  French  Republic  offered  an  average 
reduction  of  48  per  cent,  on  635  items  of  our  exports, 
leaving  but  19  unaffected,  in  return  for  our  offer  of  an 
average  reduction  of  less  than  7  per  cent,  on  126  items 
out  of  705  named  in  the  Dingley  Tariff.  It  was  es- 
timated that  this  treaty  would  have  increased  our  ex- 
ports to  France  from  twenty-five  to  thirty  million  dol- 
lars yearly.  The  most  important  concessions  made  by 
our  country  was  on  cotton  knit  goods,  reduced  from 
64  to  513/2  per  cent.,  and  on  cheap  imitation  jewelry, 
reduced  5  or  10  per  cent. ;  while  French  silk  was  ad- 
mitted at  55  instead  of  60  per  cent.  duty.  Every  one 
of  your  industries  would  have  been  benefited  by  this 
treaty.  No  rational  reason  can  exist  why  the  Senate 
did  not  approve  it.     But  the  bogus  jewelry  men  made 


A   TALK    WITH    MANUFACTURERS  l6S 

a  great  cry  against  it,  the  novelty  works  in  Providence 
and  Attleboro  appealed  to  Senator  Aldrich,  the 
hosiery  interests  of  Cohoes  and  Amsterdam  declared 
that  they  would  be  ruined,  and  the  interests  of  the  whole 
manufacturing  country  and  of  the  whole  American 
people  were  sacrificed  for  these  petty  special  interests. 
Senator  Elkins,  of  West  Virginia,  said:  "I  shall  fight 
these  treaties  to  the  bitter  end.  They  are  wrong  in 
principle  and  ruinous  in  practice.  The  Republican 
party  made  a  mistake  in  suggesting  reciprocity  in  its 
platform  and  in  enacting  a  reciprocity  law."  Senator 
Aldrich,  of  Rhode  Island,  moved  that  the  matter  be 
referred  to  the  Finance  Committee,  and  the  French 
treaty  was  never  allowed  even  to  come  to  a  vote. 

Now,  let  me  give  you  one  other  instance  in  a  foreign 
country  of  what  free  raw  material  will  accomplish. 
About  the  last  of  the  English  duties  on  imports  to  be 
repealed  was  the  sugar  duty.  The  West  India  sugar 
plantations  were  owned  by  powerful  interests  in  Eng- 
land, and  the  sugar  duty  was  maintained  for  many 
years  upon  the  plea  that  the  West  India  planters  pro- 
duced their  sugar  with  free  labor  while  the  Cubans 
and  Brazilians  produced  theirs  by  slave  labor,  and  good 
Englishmen  had  conscientious  scruples  about  eating 
sugar  produced  by  slave  labor.  Among  our  English- 
speaking  people  we  must  all  admit  that  there  is  a  heap 
of  cant.  Mr.  Dooley,  writing  "On  the  French  Char- 
acter,"   represents    the    Frenchmen    as    safely    settled 


l66  THE    TARIFF    AND   THE    TRUSTS 

down  in  Fashoda,  "In  th'  fr-ront  dure  comes  th' 
Englishman  with  a  coon  king  on  ayether  ar-rm  that's 
jus'  loaned  him  their  kingdoms  on  a  prom'ssory  note, 
and  discovers  th'  Fr-rinchman  emargin'  frim  th'  roons 
iv  th'  safe.  'What  ar're  ye  doin'  here?'  says  th' 
Englishman,  'Robbin'  th'  naygurs,'  says  th'  Fr-rinch- 
man, bein'  truthful  as  well  as  polite.  'Wicked  man,' 
says  th'  Englishman.  'What  ar-re  ye  doin'  here?' 
says  th'  Fr-rinchman.  'Improvin'  the  morals  iv  th' 
inhabitants,'  says  th'  Englishman."  The  free  admis- 
sion of  sugar  to  the  English  markets  had  an  effect  up- 
on good  morals  of  even  more  importance  than  the  sup- 
pression of  the  slave  trade  in  Cuba  and  Brazil.  France, 
Germany,  Austria  and  other  European  countries  for 
about  twenty  years  prior  to  1902  gave  bounties  to  their 
private  sugar  raisers  upon  their  exports  of  sugar.  The 
result  was  that  great  quantities  of  sugar  found  its  way 
into  England  and  was  sold  at  half  the  current  price  of 
sugar  in  the  United  States.  The  Englishmen  im- 
proved the  opportunity.  Before  the  Corn  Law  was  re- 
pealed the  people  of  England  consumed  seventeen 
pounds  of  sugar  per  head,  in  1890  they  consumed 
seventy  pounds  per  head,  and  the  consumption  grsw 
until  it  was  eighty-six  pounds  per  head,  compared  with 
twenty-five  pounds  in  France,  and  about  sixty  pounds 
in  the  United  States.  But  that  is  not  all.  With  the 
introduction  of  free  sugar  there  was  a  wonderful  in- 
crease in  the  amount  of  confectionery,  biscuit,  jam, 


A    TALK    WITH    MANUFACTURERS  167 

marmalades,  and  sweet  drinks.  Mechanical  genius 
and  enterprise  turned  out  machinery  for  the  making 
of  these  sweets  which  hitherto  had  been  undreamt  of. 
The  cost  of  labor  in  producing  a  ton  of  cheap  confec- 
tionery was  about  20s.,  whereas  in  the  early  days  it 
was  nearly  ten  times  that  amount.  England  had  free 
tin  plate,  and  improved  the  opportunity  which  it  gave 
her.  She  applied  electricity  as  motive  power  in  the 
manufacture  of  sugar  preparations.  She  bought  fruit 
in  Germany,  France,  the  United  States,  and  all  over 
the  world,  brought  it  to  England  in  British  steamers, 
made  it  into  jam  with  cheap  French  and  German  sugar, 
and  the  preserves  were  exported  back  to  Germany, 
France,  and  the  United  States.  Thus  out  of  free  sugar 
was  built  up  one  of  the  greatest  industries  which  Eng- 
land has  to-day.  The  owners  of  English  refineries  of 
sugar  had  employed  about  3,500  men.  The  new  in- 
dustries brought  into  life  by  cheap  sugar,  however, 
employed  tens  of  thousands  of  men  and  created  an  in- 
dustry involving  many  millions  of  dollars. 

Permanent  prosperity  comes  from  abundance.  The 
high  prices  which  spring  from  scarcity  are  ever  pre- 
carious, and  that  kind  of  prosperity  is  up  to-day  and 
down  to-morrow.  The  natural  law  of  free  exchange 
and  competition  evolves  high  wages,  low  prices,  large 
products,  and  a  lessening  margin  of  profit  on  each 
unit  of  product.  The  earth  does  not  everywhere  pro- 
duce the  same  thing.     Human  impulses  always  have 


l68  THE    TARIFF    AND   THE    TRUSTS 

led  men  freely  to  exchange  one  thing  for  another,  and 
these  natural  impulses  cannot  be  downed.  You  will 
buy  raw  material  from  the  producers  of  another  nation 
because  you  can  profitably  exchange  your  finished 
products  therefor,  and  any  government  that  stops  you 
from  doing  this  by  restrictive  tariffs  actually  takes  the 
bread  from  the  mouths  of  labor  because  the  working 
of  the  raw  material  into  finished  products  calls  for  in- 
creased labor.  To  interrupt  the  currents  of  exchange 
by  statutes  is  as  foolish  as  to  stop  the  flow  of  blood  in 
the  human  system  by  bandages.  Free  circulation  is 
the  only  method  for  providing  against  over-produc- 
tion. Man  with  his  laws  never  tampers  with  the  ex- 
change of  commodities  without  creating  more  injury 
than  he  does  good.  Ralph  Waldo  Emerson  well  said : 
"The  basis  of  political  economy  is  non-interference. 
The  only  safe  rule  is  to  be  found  in  self-adjustment  of 
demand  and  supply.  Do  not  legislate.  Meddle,  and 
you  snap  the  sinews  with  your  sumptuary  laws ;  give 
no  bounties ;  make  equal  laws ;  secure  life  and  property, 
and  you  need  give  no  alms.  The  level  of  the  sea  is 
not  more  surely  kept  than  is  the  equilibrium  of  value 
in  society  by  demand  and  supply;  and  artifice  or  leg- 
islation punishes  itself  by  reactions,  gluts  and  bank- 
ruptcies." The  fluctuations  in  value  which  are  so  com- 
mon, the  deficits  and  surpluses  which  arise  in  our 
United  States  Treasury  under  the  different  tariff  acts, 
the  unsettled  condition  of  business,  the  eternal  appre- 


A   TALK    WITH    MANUFACTURERS  169 

hension  of  change  in  tariff  with  times  of  depressions 
and  times  of  prosperity,  all  come  from  the  attempt  of 
legislators  to  change  the  flow  of  commerce  by  their 
bandages  and  their  quack  remedies.  If  you  could  wipe 
away  the  duties  upon  raw  materials,  if  you  could  have 
a  freer  foreign  trade,  and  then  induce  your  legislatures 
to  adjourn  for  twenty  years  and  give  you  a  period  of 
security  from  the  fear  of  change,  such  conditions 
would  enable  you  to  become  the  great  exporters  of  the 
world.  What  is  the  present  condition?  You  export 
a  little  upwards  of  $400,000,000  of  manufactured  prod- 
ucts yearly.  About  $120,000,000  of  this  amount  can 
hardly  be  regarded  as  manufactured  products,  be- 
cause it  consists  of  petroleum  and  copper  but  a  step 
removed  from  raw  material.  But  granting  that  it 
should  be  regarded  as  manufactured  products,  England 
exports  in  the  neighborhood  of  over  $1,200,000,000  of 
manufactured  products  yearly,  about  three  times  the 
amount  of  our  exports  of  manufactured  products. 
Taking  into  account  her  population  of  40,000,000,  as 
against  our  population  of  80,000,000,  each  English- 
man manufactures  for  export  about  six  times  what 
each  American  does.  Our  present  exports  to  China 
and  Japan  and  the  islands  of  the  Pacific  are  insignifi- 
cant. The  Seattle  Star  published  two  or  three  years 
ago  an  exclusive  interview  with  James  J.  Hill,  from 
which  the  following  utterances  are  taken :  "As  a  mat- 
"ter  of  fact,  we  have  no  Oriental  trade  at  present  worth 


I/O  THE    TARIFF    AND   THE    TRUSTS 

"snapping  a  finger  at.  And  we  never  will  have  until 
"we  can  ship  over  to  the  other  side  manufactured 
"products  and  sell  them  as  do  Germany  and  Great 
"Britain,  All  we  ship  now  are  iron  and  steel  and  raw 
"cotton — all  raw  commodities,  and  those  are  a  mere 
"bagatelle.  Let  me  tell  you  something  that  will  give 
"you  an  idea  of  the  insignificance  of  even  these,  our 
"greatest  present  shipping  factors  to  the  Orient — 
"while  Great  Britain  furnishes  one-half  of  the  iron  and 
"steel  to  the  Orient,  the  United  States  furnishes  but  ten 
"per  cent.  And  this  in  the  face  of  the  fact  that  we  can 
"transport  the  material  just  as  cheap  as  can  England. 
"Here's  another  little  pin  with  which  to  prick  the 
"American  invasion  bubble — the  United  States  has 
"been  selling  less  than  one-half  of  one  per  cent,  of  its 
"factory  output  to  all  the  emerging  republics,  islands 
"and  empires  of  the  Pacific.  Our  competitors  even 
"beat  us  badly  in  the  Philippines,  where  we  control  the 
"tariffs.  There  we  supply  only  seven  per  cent,  of  its 
"imports  of  competitive  goods,  the  93  per  cent,  is  sup- 
"plied  by  our  great  competitors  in  trade  countries  like 
"England  and  Germany.  I  had  to  laugh  when  I  read 
"the  magazine  articles  and  newspaper  accounts  of 
"America's  trade  conquests  in  Europe.  We  Americans 
"were  so  puffed  up  about  it  that  we  began  to  make 
"folks  across  the  Atlantic  really  believe  that  the  Amer- 
"ican  invasion  was  a  reality.  We  shipped  over  a  few 
"pyrotechnical   cargoes,    a   bunch  of  typewriters   and 


A   TALK    WITH    MANUFACTURERS  I7I 

"safes,  and  crowded  like  a  lot  of  Bantam  roosters.  But 
"all  the  time  the  value  of  our  manufactures  sold  in 
"Europe  steadily  declined,  until  present  records  show 
"a  drop  of  one  hundred  million  dollars  since  1900. 
"We  must  look  to  the  Orient.  That  field  belongs  to 
"us  and  we  should  control  it.  To  do  this,  we  must  re- 
"duce  the  cost  of  manufactured  products  and  we  must 
"change  our  tarifif — we  have  outgrown  the  latter." 
Our  exports  to  South  America  are  also  insignificant, 
not  one-tenth  the  amount  they  ought  to  be.  The  truth 
is  we  have  built  up  a  ring  fence  around  America  to 
keep  out  foreign  imports  and  the  same  fence  keeps  in 
domestic  products.  We  cannot  become  great  export- 
ers unless  we  become  great  importers.  We  shut  out 
the  raw  material  of  the  East  and  of  South  America 
and  we  shut  in  the  highly  finished  product  of  American 
labor.  As  an  example  how  low  duties  upon  foreign 
importations  result  in  greatly  increased  exportations, 
I  will  quote  to  you  from  the  Hand-Book  of  the  Union- 
ist Free  Food  League  in  England  in  the  recent  con- 
test between  Mr.  Chamberlain,  as  leader  of  the  Con- 
servatives, and  the  Liberal  party.  On  pages  8  and  9 
of  this  book  are  tables  showing  the  movement  of  ex- 
ports during  the  periods,  in  which  the  nineteenth  cen- 
tury may  be  divided  from  a  point  of  view  of  fiscal 
policy,  and  the  result  is  summed  up  in  these  words : 
"During  the  thirty  years  (1801-1831)  of  extreme  re- 
"striction  (of  imports)  exports  did  not  expand  at  all, 


172  THE   TARIFF   AND   THE    TRUSTS 

"but  fluctuated  between  a  shrinkage  of  £7,000,000  and 
"a  shrinkage  of  £5,000,000,  During  the  ten  years 
"(1831-1841)  of  relaxation  exports  expanded  by 
"£15,000,000,  an  average  of  £1,500,000  a  year.  Bur- 
ning the  ten  years  of  larger  relaxation  (1841-1851) 
"exports  expanded  by  £22,000,000,  an  average  of 
"£2,200,000  a  year.  During  the  51  years  (1851-1902) 
"after  complete  freedom  exports  have  expanded  by 
"£209,000,000,  an  average  of  £4,098,000  a  year.  This 
"is  conclusive  proof  that  unrestricted  importation,  in- 
"stead  of  injuring  export  trade,  is  a  powerful  and  cer- 
"tain  means  of  promoting  it."  We  ought  to  be  ex- 
porting at  least  five  times  the  amount  of  manufactured 
products  which  we  are,  and  with  free  ships,  free 
commerce,  and  free  raw  material  we  would  be  export- 
ing that  to-day.  The  freedom  of  exchange  between 
our  several  states,  rather  than  the  tariff,  has  resulted 
in  giving  us  upwards  of  eighty  millions  of  the  best- 
paying  consumers  in  the  world  for  our  manufactured 
products,  and  with  such  a  home  market  reasonably  se- 
cured to  us  we  ought  to  enlarge  that  market  to  a 
world  market.  A  country  as  great  as  ours,  with  gi- 
gantic natural  resources,  with  free  commerce  and  effi- 
cient labor,  can  actually  absorb  to  itself  a  consider- 
able part  of  the  commerce  of  the  world.  The  policy 
of  high  protection  which  we  have  pursued  for  forty 
years,  if  adhered  to,  will  ultimately  strangle  itself. 
Our  resources  are  so  great,  our  energy  so  resistless, 


A  TALK   WITH    MANUFACTURERS  1 73 

that  we  will  burst  the  bonds  that  bind  us.  The 
domestic  market  no  longer  suffices.  The  foreign 
market  must  be  entered,  and  from  the  very  fact  of  our 
immense  resources  and  of  our  efficient  use  of  ma- 
chinery our  exports  must  greatly  expand.  No  other 
people  in  the  world  have  such  resources.  No  other 
people  in  the  world  are  capable  of  making  so  much  of 
them.  An  increase  in  the  exports  of  manufactured 
articles  is  an  absolute  necessity.  A  million  immi- 
grants come  to  us  every  year.  Our  population  is 
rapidly  increasing.  The  free  admission  of  raw  ma- 
terial is  the  safety  valve  of  labor.  Starving  men  do 
not  reason.  By  and  by  they  will  appreciate  the  op- 
pression which  the  trust  prices  bring  to  them,  and  even- 
tually they  will  rise  and  destroy  monopoly.  Such 
risings  show  little  mercy  to  the  institutions  against 
which  they  are  directed  or  to  the  individuals  whose 
fortunes  are  bound  up  with  them,  and  you  must  not 
complain,  if  you  do  not  yourselves  remedy  this  evil, 
should  scant  mercy  be  shown  you  when  the  day  of 
reckoning  arrives. 

Again,  the  protective  tariff  in  this  country  is  simply 
driving  your  manufactories  to  foreign  countries  where 
they  can  get  cheaper  raw  materials  and  avoid  retalia- 
tory tariffs.  The  Singer  Machine  Company  has  es- 
tablished itself  at  Kilbowie  in  England,  the  Babcock 
and  Wilcox  Company  at  Renfrew  in  the  same  country, 
the  Westinghouse  Company  has  established  an  enor- 


174  THE   TARIFF    AND    THE    TRUSTS 

mous  plant  in  the  Manchester  district,  the  Chicago 
American  Tool  Company  has  built  a  plant  at  Frazer- 
burg,  near  Aberdeen,  the  Western  Electric  Company 
of  Chicago  is  interested  in  extensive  factories  in  Lon- 
don, Paris,  Antwerp,  and  Berlin.  The  General  Elec- 
tric Company  has  recently  constructed  a  large  new 
factory  at  Rugby  in  England.  The  Hoe  Company  is 
making  printing  presses  in  London,  where  also  the 
American  Linotype  is  making  machinery.  The  Draper 
Company  has  built  a  factory  in  Lancashire.  The 
American  Locomotive  Company  has  recently  acquired 
control  of  the  new  works  directed  by  the  Montreal 
Locomotive  and  Machine  Company,  with  the  inten- 
tion of  executing  its  orders  for  locomotives  in  Canada. 
The  Bullock  Electric  Works  of  Cincinnati  have  es- 
tablished branches  in  Canada  which  are  said  to  have 
captured  the  works  at  Lachine,  We  read  in  the  Iron 
Age  of  recent  date  that  Canadian  cities  are  selecting 
as  a  new  officer  of  the  municipality  a  business  agent 
whose  concern  it  is  to  facilitate  the  settlement  of 
American  manufactories  in  different  parts  of  Canada. 
Louis  XIV,  by  the  Edict  of  Nantes,  drove  out  of  France 
tens  of  thousands  of  Huguenot  w^eavers,  and  they  fled 
to  England  and  laid  the  foundation  of  modern  English 
industries.  Philip  H  of  Spain  drove  tens  of  thousands 
of  Flemish  weavers  from  the  Netherlands,  and  they, 
too,  found  an  asylum  in  England  and  helped  to  lay  the 
foundations  of  her  vast  industrial  system.     Our  pro- 


A   TALK    WITH    MANUFACTURERS  I75 

tective  tariff  which  attempts  to  control  by  law  the  in- 
dustries of  this  country  is  no  less  oppressive  than  the 
edict  of  Louis  XIV  or  the  tyranny  of  Philip  II,  and  if 
it  succeeds  in  driving  our  great  industries  into  freer 
markets  where  they  can  purchase  their  raw  material 
reasonably,  posterity  will  pass  the  same  judgment  up- 
on us  that  it  has  passed  upon  the  despotic  government 
of  Louis  XIV  and  Philip  II. 

The  United  States  Steel  Corporation  controls  a 
large  part  of  the  iron  ore  deposits  of  the  Lake  Superior 
Region.  Its  chain  of  control  over  the  product  from 
the  time  it  is  dug  out  of  the  ground  until  it  reaches  you 
as  your  raw  material  is  complete.  The  steam  shovels 
that  lift  the  ore,  the  cars,  the  railroads  themselves,  the 
lake  steamers,  the  docks,  the  smelters  and  converters, 
the  rolling  mills  and  the  steel  works,  are  theirs.  They 
pay  no  middleman's  profits,  and  with  a  good  profit 
they  can  furnish  you  your  raw  material  for  tools  and 
machinery  and  ships  and  railways  more  cheaply  than 
any  other  like  corporation  in  the  world.  In  ''British 
Industries,"  a  volume  recently  edited  by  Professor  W. 
J.  Ashley,  Mr.  J.  S.  Jeans,  the  Secretary  of  the  British 
Iron  Trade  Association,  says  of  the  English  iron  man- 
ufacturers: "There  is  no  obvious  reason  why,  if  we 
"are  to  make  iron  at  all,  we  should  not  make  it  under 
"the  best  and  most  economical  conditions  possible  to 
"us.  We  could  hardly  lose  anything  if  we  raised  the 
"productiveness  of  our  plants,  reduced  the  number  of 


176  THE   TARIFF    AND   THE   TRUSTS 

"hands  employed  for  a  given  output  of  iron  and  steel, 
"and  got  a  larger  annual  production  per  yield  of  cap- 
"ital  invested.  /  cannot  justify  the  British  pig-iron 
"makers  in  only  getting  an  average  annual  output  of 
"about  25,000  tons  per  furnace,  while  the  Americans 
"average  is  61,000  tons  and  the  average  of  the  bitiimi- 
"nous  furnaces  is  only  about  yg,ooo  tons.  As  with 
"blast  furnaces,  so  with  Bessemer  converters  and  open- 
"hearth  furnaces.  The  American  efficiency  is  much 
"larger  than  our  own."  Now,  it  is  conceded  by  our 
competitors  that  we  can  make  pig  iron  and  steel  cheaper 
than  they  can,  yet  the  trust  is  protected  against  the 
competition  of  England  in  iron  and  steel  on  an  average 
of  about  45  per  cent.,  and  you  are  charged  for  the  raw 
materials  of  your  machine  shops  a  price  increased  by 
nearly  the  amount  of  the  duty.  Is  this  justice?  Should 
the  United  States  Steel  Corporation  continue  to  extort 
money  from  thousands  of  manufacturers  dependent 
upon  its  product  for  raw  material?  They  may  be  a 
balance-wheel  holding  the  market  steady,  but  how  can 
you  explain  the  violent  fluctuations  in  pig  iron  during 
the  last  four  years  if  this  be  so?  A  balance-wheel 
which  insures  systematic  injustice  is  one,  I  submit, 
which  should  be  smashed.  Our  great  copper  com- 
panies handle  their  copper  in  the  same  manner ;  they 
have  the  greatest  supplies  known  in  the  world,  and  they 
can  furnish  you  the  copper  which  you  use  in  your 
electrical  works  more  cheaply  than  it  can  be  furnished 


A   TALK    WITH    MANUFACTURERS  1 77 

elsewhere.  The  same  is  true  of  nickel  ore,  lead,  and 
every  other  element  of  your  manufacture,  and  yet  you 
are  paying  all  these  corporations  an  increased  price  for 
your  raw  materials,  and  attempting  under  these  con- 
ditions to  compete  with  your  foreign  rivals.  How 
long  are  you  going  to  submit  to  this?  Our  ancestors 
fought  a  seven  years'  war  from  Lexington  to  York- 
town  to  vindicate  a  principle  no  less  sacred  than  your 
right  to  purchase  your  raw  material  of  your  own 
countrymen  at  a  reasonable  price.  You  know  how  to 
organize  and  how  to  enforce  your  rights.  The  millions 
of  American  farmers,  the  millions  of  workingmen,  and 
the  millions  of  retired  and  professional  men  have  not 
the  same  capacity  for  organization  and  redress  of  their 
like  grievances  of  high-priced  necessaries  of  life.  But 
if  the  great  body  of  smaller  manufacturers  should  unite 
and  demand  justice  from  the  oppression  of  the  larger 
ones  who  control  the  raw  material,  there  is  reason  to 
believe  that  a  hearing  could  be  procured  and  a  remedy 
applied.  Again  I  submit  to  your  consideration  that 
the  industries  of  our  country  are  based  upon  provi- 
sions of  the  statute  law,  and  that  any  industry  which 
depends  upon  the  legislature  for  success  is  in  a  peril- 
ous condition.  You  know  the  men  who  represent  your 
districts  in  Congress,  and  as  a  rule  they  are  politicians. 
They  give  little  attention  to  the  study  of  those  prin- 
ciples which  underlie  economy  as  applied  to  industrial 
matters,  yet  upon  their  judgment  and  their  laws  are 


178  THE    TARIFF   AND   THE   TRUSTS 

based  to  quite  an  extent  the  welfare  of  the  manufac- 
turer. Is  it  wise  to  confer  such  a  power  on  any  legis- 
lature? Do  you  feel  safe  with  your  interests  depend- 
ing to  such  an  extent  upon  legislation  ?  Have  you  con- 
fidence in  the  business  capacity  of  the  men  who  shape 
our  laws?  Do  you  not  see  that  frequent  changes  are 
dangerous  ?  Do  you  believe  that  government  can  super- 
intend private  business  without  being  corrupted  ?  You 
must  know  that  the  pretensions  and  usurpations  of 
politicians  have  grown  to  such  an  extent  as  to  endanger 
every  business,  that  private  industries  in  their  hands  will 
be  no  more  than  a  football  for  political  reward  or 
private  advantage.  How  many  politicians  have  you 
known  that  you  would  entrust  with  the  conduct  of 
your  business,  and  if  not,  how  do  you  expect  them  to 
exercise  business  capacity  when  they  attempt  to  con- 
trol private  affairs  by  law?  In  1888  these  politicians 
said,  ''Leave  the  Mills  Bill  alone  as  it  is ;  it  is  better 
for  the  elections."  To-day  they  say,  "Leave  the 
Dingley  Bill  as  it  Is  until  after  election."  What  do 
you  think  of  a  condition  where  the  business  interests 
of  the  country  depend  upon  the  result  of  elections? 
The  institution  of  slavery  itself  did  not  do  more  to  de- 
grade and  corrupt  this  country  than  has  our  recogni- 
tion of  the  right  of  political  parties  to  control  by  law 
our  industries.  Every  department  in  life  from  Con- 
gress to  State  Legislatures,  from  State  Legislatures  to 
municipalities,   from   municipalities  to   trades   unions, 


A   TALK    WITH    MANUFACTURERS  1 79 

and  from  the  trades  unions  down  to  the  newsboy  at 
the  street  corner,  is  demoraHzed  by  the  alHance  be- 
tween government  and  private  business  and  by  the  de- 
sire of  many  men  to  get  special  advantages  for  classes 
or  localities  at  the  expense  of  the  public.  This  sys- 
tem has  encouraged  and  promoted  corruption  as  the 
institution  of  slavery  never  did  and  as  no  other  insti- 
tution in  this  country  has  ever  done,  and  no  one  knows 
this  better  than  you,  who,  I  fear,  have  had  more  or  less 
to  do  with  it.  Mr.  F.  W.  Cheney,  of  Cheney  Brothers, 
silk  manufacturers,  at  South  Manchester,  Connecticut, 
in  his  testimony  before  the  Industrial  Commission, 
said  of  the  scramble  for  legislation  whenever  a  new 
tariff  is  made:  "You  know  how  it  stirs  up  all  the 
selfishness  there  is  in  humanity  and  what  a  grabbing 
game  it  is."  Protective  tariffs  are  not  made  by  Con- 
gress, they  are  not  dictated  by  you  smaller  manufac- 
turers. They  are  dictated  by  the  great  moneyed  in- 
terests connected  with  vast  corporations  who  monop- 
olize more  than  half  the  industries  of  the  country.  In 
the  process  legislators  are  corrupted,  society  is  de- 
bauched, honor  is  soiled,  and  self-respect  is  lost. 

Finally,  let  me  call  to  your  attention  that  there  is 
in  the  progress  of  civilization  a  time  at  which  exclu- 
sive privileges  must  be  relaxed  or  the  possessors  must 
perish  along  with  them.  That  time  has  come  in  Amer- 
ican industry.  To  you  who  read  the  chapters  in  this 
volume  on  "How  England  got  Free  Trade"  and  on 


l80  THE    TARIFF   AND   THE    TRUSTS 

"the  German  Tariff"  it  is  unnecessary  to  tell  you  what 
I  mean.  We  have  reached  the  same  point  that  ex- 
isted in  England  at  the  time  of  the  repeal  of  the  Corn 
Laws.  Our  manufacturing  interests  have  passed  the 
point  where  they  supply  their  own  people,  and  they 
must  have  markets  abroad.  They  cannot  continue  to 
sell  their  products  at  one  price  at  home  and  at  a  lower 
price  to  foreigners.  We  are  all  willing  to  submit  to 
taxation  for  the  support  of  government,  but  we  will 
never  continue  to  submit  to  taxation  by  private  cor- 
porations for  the  benefit  of  foreigners.  To  attempt 
under  such  circumstances  to  continue  exclusive  priv- 
ileges is  the  very  height  of  rashness.  You  already 
hear  the  wail  of  agony  from  New  England.  You 
know  the  attitude  of  the  farmers  of  Iowa.  A  time  of 
depression  will  array  the  great  mass  of  the  people 
against  such  a  condition.  A  time  when  laboring  men 
are  hungry  and  without  a  job  will  result  in  riot  and 
almost  in  revolution.  We  cannot  live  as  a  nation  with- 
out justice  to  the  people  in  every  part  of  the  land.  We 
cannot  afford  to  array  New  England  against  the  rest 
of  the  country  by  depriving  her  manufacturers  of  a 
chance  to  live  and  thrive ;  much  more,  you  cannot 
afford  to  array  the  great  body  of  consumers  against 
you  because  you  are  the  possessors  of  special  privileges 
which  give  you  the  right  to  take  an  undue  amount  of 
their  hard-earned  money.  Gladstone,  in  1881,  speak- 
ing to  an  English  audience,  said:  "As  long  as  Amer- 


A   TALK    WITH    MANUFACTURERS  l8l 

ica  adheres  to  the  protective  system  your  commercial 
primacy  is  secured.  Nothing  in  the  world  can  wrest 
it  from  you  while  America  continues  to  fetter  her  own 
strong  hands  and  arms,  and  with  these  fettered  arms  is 
content  to  compete  with  you  who  are  free  in  neutral 
markets.  As  long  as  America  follows  the  doctrine  of 
protection,  or  as  long  as  America  follows  the  doctrines 
now  known  as  fair  trade,  you  are  perfectly  safe,  and 
you  need  not  allow,  any  of  you,  even  your  lightest 
slumbers  to  be  disturbed  by  the  fear  that  America  will 
take  from  you  your  commercial  primacy."  All  history 
teaches  the  truth  of  Mr.  Gladstone's  words.  Fettered 
trade  is  never  progressive  trade.  Look  to  Ghent, 
Bruges,  and  the  other  early  Flemish  cities,  and  see  how 
municipal  freedom  gave  life  to  their  manufactures. 
Look  at  England  since  the  repeal  of  her  duties  in  the 
forties,  and  see  how  wondrously  her  commerce  has 
expanded,  while  the  liberty  of  the  citizen  is  protected 
with  a  care  almost  unknown  in  the  rest  of  the  world. 
Liberty  is  the  soul  of  industry,  and  without  it  industry 
and  commerce  will  shrivel  and  decay. 


CHAPTER  VI 


A   TALK    WITH    LABORERS 


You  are  often  told  by  politicians  that  the  high  price 
of  your  day's  wage,  the  demand  for  your  labor,  and 
your  general  well-being,  all  depend  directly  upon  the 
continuance  of  a  high  protective  tariff.  This  is  not 
true,  as  you  can  readily  see,  by  considering  the  follow- 
ing facts. 

The  first  contention  is  that,  because  of  the  protect- 
ive tariff  and  the  increased  price  which  it  allows  manu- 
facturers to  charge  for  their  goods,  you  are  receiving 
higher  wages  than  the  laborers  making  competing 
goods  in  Europe.  In  short,  the  argument  is  that  pro- 
tective tariffs  mean  high  wages.  They  do  not  mean 
high  wages,  and  duties  are  not  imposed  with  the  idea  of 
covering  the  difference  between  wages  of  workmen  in 
Europe  and  in  our  own  country.  You  are  paid  high 
wages  because  your  work  in  the  factory  by  the  use  of 
machinery  is  much  more  effective  than  the  work  of 
foreign  operatives  where  less  machinery  is  used.  It 
was  in  the  Presidential  campaign  of  1840  that  the  con- 
tention that  you  were  competing  with  pauper  labor 
was  first  set   forth.     At  that  time  manufacturing  in 

182 


A   TALK    WITH    LABORERS  1 83 

this  country  as  well  as  abroad  was  largely  by  hand 
labor.  Since  that  time  the  invention  of  labor-saving 
machinery  has  simply  revolutionized  the  cost  of  man- 
ufacturing, and  to-day,  in  proportion  to  the  product  of 
your  day's  labor,  you  receive  the  lowest  wage  in  the 
world.  This  has  been  recognized  by  many  eminent 
men  who  have  investigated  the  matter.  Mr.  Hill, 
formerly  statistician  of  the  State  Department  at 
Washington,  when  before  the  Tariff  Commission,  ap- 
pointed in  1882  to  determine  whether  duties  upon 
foreign  imports  should  be  reduced,  said  to  the  com- 
mission that  according  to  the  reports  of  American  Con- 
suls in  Great  Britain  in  that  very  year  our  5,250,000 
workmen  produced  double  what  she  did  with  5,140,000 
workmen.  In  1878  William  M.  Evarts,  then  Secre- 
tary of  State,  through  American  consuls  in  different 
parts  of  the  world,  collected  the  facts  as  to  the  amount 
of  production  and  cost  of  labor  in  Continental  coun- 
tries, and  summarized  those  reports  in  the  following 
language :  "The  average  American  workman  performs 
from  once  and  a  half  to  twice  as  much  work  in  a  given 
time  as  the  average  European  workman."  Mr. 
Blaine,  upon  information  from  American  consuls  when 
he  was  Secretary  of  State  in  1881,  said:  "Undoubtedly 
the  inequalities  of  wages  of  English  and  American 
operatives  are  more  than  equalized  by  the  greater  effi- 
ciency of  the  latter  and  their  longer  hours  of  labor." 
Andrew  Carnegie  said  a  few  years  ago :  "It  is  not  the 


184  THE   TARIFF    AND   THE   TRUSTS 

lowest,  but  the  highest  paid  labor,  with  scientific  man- 
agement and  machinery,  which  gives  cheapest  products. 
Some  of  the  important  staple  articles  made  in  Britain, 
Germany  and  America  are  produced  cheapest  in  the 
last,  with  labor  paid  double."  United  States  Senator 
Beveridge,  of  Indiana,  in  his  recent  book  entitled  "The 
Russian  Advance,"  speaking  of  the  wages  of  the  oper- 
atives in  Russian  factories,  says:  "But  low  as  these 
wages  appear,  yet,  in  comparison  with  the  same  Amer- 
ican labor,  these  common  workingmen  and  women  of 
Russia  may  truthfully  be  said  to  be  overpaid.  Their 
wages  are  less  than  the  wages  of  American  working- 
men,  their  working  ability  is  still  smaller.  One  can- 
not believe  either  that  the  Russian  workingman  or 
woman  for  a  long  time  will  be  as  efficient  as  the  Amer- 
ican workingman  or  woman."  Mr.  A.  Maurice  Low, 
a  thoroughgoing  protectionist,  in  his  recent  book  pub- 
lished in  London,  entitled,  "Protection  in  the  United 
States"  says :  "We  have  the  authority  of  all  competent 
observers  in  America  that  one  of  the  reasons  to  explain 
the  secret  of  American  prosperity  is  the  great  produc- 
tive power  of  the  American  workingman,  his  output 
being  so  much  larger  than  those  of  his  foreign  competi- 
tor that  the  cost  of  the  American  product  is  less  than 
that  of  any  other  workman  ;  and  it  has  also  been  demon- 
strated that  wages  and  labor  cost  bear  not  the  relation 
that  is  ordinarily  supposed ;  that  is  it  is  not  true  that 
low  wages  are  an  indication  of  low  labor  cost,  but  rath- 


A   TALK    WITH    LABORERS  185 

er  the  reverse,  the  low-priced  workman  being  usually 
an  unintelligent  and  unskilled  worker  and  unable  to 
compete  with  the  high-priced  worker  of  greater  intel- 
ligence and  skill."  Mr.  Arthur  Shadwellj  who  gives 
us  in  his  recent  work,  "Industrial  Efficiency,"  his  con- 
clusions from  personal  examination  and  investigation 
of  the  conditions  of  labor  and  the  price  of  labor  in  the 
factories  of  Germany,  Great  Britain,  and  the  United 
States,  says,  in  criticizing  the  report  of  the  Moseley 
Commission  to  this  country  representing  the  trades 
unions  of  Great  Britain,  "I  still  maintain  that  workmen 
do  work  harder  and  very  much  harder  in  America,  not 
in  every  case,  but  taken  all  around.  It  is  not  a  conclu- 
sion derived  from  a  limited  observation  only,  but  rests 
upon  the  unanimous  evidence  of  the  most  unimpeach- 
able witnesses,  corroborated  by  observation.  American 
factories  and  workshops  swarm  with  English  work- 
men, foremen  and  managers.  I  have  talked  with  many 
of  them  in  different  trades  and  different  localities,  and 
they  have  all  said  the  same  thing."  The  citations 
above  are  from  the  words  of  protectionist  writers  and 
speakers,  with  the  exception  of  Mr.  Shadwell,  about 
whose  opinions  as  to  protection  and  free  trade  his  book 
makes  no  disclosure.  You  will  see  that  they  all  agree 
that  the  reason  of  the  higher  wage  in  America  is  the 
fact  that  you  use  efficient  machinery  to  manufacture, 
and  that  the  product  of  your  labor  is  greater  than  the 
product  of  foreign  labor.     It  means  nothing  to  say  that 


l86  THE    TARIFF   AND   THE    TRUSTS 

laborers  in  the  United  States  are  paid  $25  a  week  and 
in  Germany  $15  a  week  since  both  countries  impose 
tariffs  upon  foreign  imports.  The  question  to  ask  al- 
ways is  how  much  does  the  American  produce  with 
machines  in  a  single  day  and  how  much  does  the  Ger- 
man produce;  then,  finding  out  the  product  of  each 
day's  labor,  you  can  determine  the  difference  in  the 
earning  capacity  of  the  men.  Suppose  you  are  em- 
ployed in  the  manufacture  of  chairs,  and  instead  of 
being  paid  so  much  money  for  each  day's  work,  your 
employer  gives  you  one  chair  for  each  five  you  make. 
If  you  make  five  chairs,  you  are  entitled  to  one  chair 
for  your  day's  labor;  if  you  make  twenty  chairs  per 
day,  you  are  entitled  to  four  chairs  for  your  day's 
work.  Now,  you  are  paid  money  for  the  day's  labor 
because  you  cannot  market  your  chairs  so  easily  as 
the  manufacturer  who  makes  thousands  of  them.  The 
money  is  only  a  medium  of  measuring  the  number  of 
chairs  which  you  have  earned  and  in  the  place  of  which 
you  have  taken  money.  Your  day's  wage  depends 
entirely  upon  the  amount  of  the  product  of  the  day's 
work,  and  if  by  the  use  of  labor-saving  machines  you 
can  make  a  hundred  chairs  instead  of  twenty  in  a 
day,  the  amount  paid  for  your  labor  should  be  in- 
creased. Assuming  that  the  foreign  laborer  makes 
his  chairs  by  hand  labor  and  you  yours  by  the  em- 
ployment of  machinery  at  every  step  in  the  manufac- 
ture, and  that  the  product  of  your  day's  labor  is  a 


A   TALK    WITH    LABORERS  iS/ 

hundred  chairs  to  his  two,  three  or  five,  you  are  paid 
the  higher  wage  because  the  product  of  your  labor  is 
so  much  greater  that  your  employer  can  afford  to  pay 
you  more  because  the  cost  of  his  product  measured  by 
the  unit  of  production  is  much  lower  than  that  of  his 
competitor.  What  is  true  of  making  chairs  is  true  in 
hundreds  of  lines  of  manufacturing  in  which  you  are 
engaged.  Mr.  Leroy-Beaulieu,  the  eminent  French 
writer,  in  his  recent  work  on  the  "United  States  in 
the  Twentieth  Century,"  taking  our  census  of  1900 
and  official  reports  in  England  as  a  foundation  for  his 
statement,  says :  "Absolutely  as  well  as  relatively  the 
'number  of  people  in  Great  Britain  engaged  in  in- 
'dustry  is  much  higher  than  the  number  of  people  so 
'engaged  in  the  United  States  although  the  value  of 
'the  goods  manufactured  by  the  former  is  not  much 
'more  than  half  that  of  the  goods  made  by  the  latter. 
'.  .  .  It  can  be  explained  only  on  the  assumption  that 
'the  American  workingman  works  harder  than  the 
'workingman  of  other  countries,  or  that  he  receives 
'more  efficacious  assistance  from  machinery,  or  that 
'both  these  conditions  prevail.  .  .  .  We  are  perfectly 
'justified  in  concluding  from  them  that  the  work  of  an 
'American  workman  is,  on  the  average,  more  pro- 
'ductive  than  that  of  the  British  workman  and  than 
'that  of  any  other  workman  in  the  world,"  You  who 
are  employed  in  factories  must  have  observed  that  your 
employers  are  multiplying  their  machines  and  drop- 


l88  THE    TARIFF   AND   THE   TRUSTS 

ping  men  from  their  employment.  One  man  now  at- 
tends to  many  more  machines  than  he  did  a  few  years 
ago,  and  the  improved  machines  are  much  more  effi- 
cient in  the  amount  of  production. 

Again,  you  are  told  that  all  our  prosperity  is  due  to 
the  protective  system,  that  the  general  range  of  your 
wages  is  created  by  the  protective  tariff,  and  your  at- 
tention in  that  connection  is  frequently  called  to  the 
pauper  labor  of  other  countries.  The  statement  is 
plausible,  and  it  has  deceived  many  a  laboring  man, 
but  it  is  absolutely  without  foundation.  The  people 
of  Great  Britain  for  at  least  the  last  forty  years  have 
carried  on  their  industries  under  a  complete  absence 
of  protective  tariffs.  In  1879  the  German  Empire  es- 
tablished protective  duties,  with  the  intent  of  restrict- 
ing foreign  competition.  The  policy  of  protection  has 
prevailed  in  France  for  centuries.  Now  let  us  see  the 
prevailing  rate  of  wages  in  each  country.  The  Board 
of  Trade  in  England  has  recently  made  a  very  thorough 
examination  with  reference  to  the  amount  of  wages 
paid  to  workmen  in  a  certain  number  of  trades  in  that 
country  and  the  weekly  wage  of  laborers  in  the  same 
trades  in  Germany  and  France.  I  have  placed  below 
the  table  as  it  is  produced  by  the  English  Board  of 
Trade  in  the  weekly  wage  of  shillings  and  pence  in 
that  country.  You  will  see  by  examining  this  table 
that  the  price  of  labor  in  skilled  trades  in  the  United 
Kingdom  of  Great  Britain  is  nearly  twice  that  of  Ger- 
many and  much  higher  than  it  is  in  France : 


A   TALK    WITH    LABORERS  I89 

Comparison  of  Rates  of  Wages  in  Skilled  Trades  in  the 
United  Kingdom,  Germany,  and  France 

United 
Kingdom  Germany  France 

(A)  Number    of    quotations    of 

rates  of  wages  on  which 
the  following  results  are 
based     470  184  248 

(B)  Mean    weekly    rates    for    15 

skilled  trades                                           s.  d.  s.  d.  s.  d. 

I.  Capital  cities    42  o  34  0  36  o 

II.  Other  cities  and  towns.   36  0  22  6  22  10 

(C)  Percentage    comparison 

(United    Kingdom-ioo) 

I.  Capital   cities    100  57  86 

II.  Other  cities  and  towns 100  63  63 

Sir  John  Brunner,  a  member  of  the  EngHsh  House 
of  Commons  and  at  the  head  of  one  of  the  great  Eng- 
lish shipbuilding  firms,  in  a  letter  to  the  London  Times 
of  July  14,  1903,  based  on  actual  examination  of  wages 
in  Great  Britain  and  European  countries,  says :  "The 
average  daily  wage  paid  to  the  workmen  employed  in 
the  alkali  trade  is : 

In  Germany 78  per  cent,  of  the  English  rate 

In     France 77         "  "  " 

In     Austria 56         "  "  " 

In     Hungary 43  "  "  " 

"To  earn  these  wages  in  Germany,  in  France,  in 
Austria,  and  in  Hungary,  the  men  have  to  work  twelve 
hours  a  day,  whilst  in  England  the  men  work  only 
eight  hours  a  day.  We  give  our  men  a  week's  holiday 
annually  without  stoppage  of  pay.  The  German,  there- 
fore, has  to  work  52  weeks  twelve  hours  a  day  to  get 
78  per  cent,  of  the  wage  of  the  Englishmen,  working 


190  THE   TARIFF    AND   THE   TRUSTS 

51  weeks  eight  hours  a  day;  and  the  others  get  less  in 
the  proportion  shown."  Mr.  Shadwell  in  his  recent 
work  on  "Industrial  Efficiency  in  Great  Britain,  Ger- 
many, and  the  United  States,"  after  a  most  exhaustive 
examination,  has  arrived  at  the  average  daily  wage  of 
unskilled  labor  in  the  three  countries  in  the  following 
figures : 

England  Germany  U.  S.  A. 

3s.  to  4S.  2S.  6d.  to  3s.  3s.  to  7s. 

The  protectionist  argues  to  you  as  follows :  "The 
United  States  has  protection,  the  people  of  the  United 
States  pay  high  wages  for  labor ;  England  has  free 
trade,  the  employers  in  England  pay  lower  wages  for 
labor  than  in  the  United  States;  therefore  protection 
produces  high  wages,  and  free  trade  produces  low 
wages."  Let  us  continue  this  logic.  France  and 
Germany  each  have  a  protective  system  of  tariffs ;  the 
employers  in  France  and  Germany  each  pay  low  wages. 
England  has  free  trade,  and  the  employers  of  England, 
compared  with  those  of  France  and  Germany,  pay  high 
wages;  therefore  free  trade  makes  high  wages.  Now 
you  see  it  and  now  you  don't  see  it.  What  do  you 
think  of  the  argument  that  our  protective  tariff  system 
in  and  of  itself  produces  high  wages?  Let  us  go  a 
little  farther.  From  its  early  history  until  a  recent 
date  the  importation  of  foreign  imports  into  New 
South    Wales    has    been    without    protective    duties. 


A   TALK    WITH    LABORERS  IQI 

Recently  New  South  Wales  has  become  a  part  of  the 
Australian  Confederation,  and  comparatively  low 
duties  are  imposed  upon  foreign  imports  to  the  Con- 
federation. Before  the  Confederation,  however,  the 
colony  of  Victoria,  separated  only  from  New  South 
Wales  by  the  Murray  River,  imposed  high  duties  upon 
foreign  imports.  Now  we  have  for  comparison  two 
countries  lying  side  by  side  of  about  the  same  density 
of  population  and  under  similar  circumstances  in 
every  respect,  one  having  the  protective  system  and 
the  other  the  free-trade  system.  Now  let  us  see  what 
the  prices  of  labor  were  in  these  adjoining  colonies 
under  these  different  systems.  Mr.  C.  H.  Chomley, 
in  a  recent  book  entitled  "Protection  in  Canada  and 
Australasia,"  sets  forth  the  following  table  for  daily 
wages  for  Sydney,  the  capital  of  New  South  Wales, 
and  Melbourne,  the  capital  of  Victoria,  during  the 
period  of  1892-1896,  when  both  colonies  were  suffer- 
ing from  depression,  and  before  Victoria  had  reduced 
her  most  oppressive  duties : 


Melbourne     Sydney 

s.  d.  s.  d. 

Carpenters    75  811 

Bricklayers     76  9     8 

Masons      8  6  811 

Plasterers     78  8     6 

Painters     6  8  8     0 

Blacksmiths     100  8     6 

Boilermakers     106  9     o 

Navvies     60  6     o 

You  will  observe   that   I  first  compared  wages  in 


192  THE   TARIFF    AND   THE   TRUSTS 

Great  Britain,  an  old  country  and  densely  populated, 
with  Germany  and  France,  also  old  countries  and 
densely  populated.  Now  the  industrial  conditions  of 
Belgium  in  many  respects  resemble  those  of  England. 
Belgium  is  densely  populated,  having  589  persons  to 
the  square  mile,  as  compared  with  558  in  England  and 
Wales.  Both  are  manufacturing  countries,  but  Bel- 
gium has  a  moderate  protective  tariff,  and  the  price 
of  labor  in  Belgium  is  considerably  lower  and  the 
hours  of  labor  longer  than  in  Great  Britain.  In  Hun- 
gary, like  Germany  and  France,  high  protective  tariffs 
prevail,  and  if  protective  tariffs  produced  high  wages 
we  would  expect  to  find  them  in  Hungary,  yet  more 
than  one-half  of  the  factory  operatives,  53  per  cent., 
earn  less  than  $3  per  week  of  our  money,  and  about 
one-third  of  the  remainder  earn  less  than  $2.12  per 
week. 

But,  coming  to  our  own  country,  you  will  find  argu- 
ments showing  still  more  clearly  that  the  protective 
tariff  system  is  not  entitled  to  any  credit  for  the  price 
of  labor  in  the  United  States.  If  the  price  of  labor 
depended  solely  upon  the  tariff,  it  would  operate  alike 
upon  laborers  in  all  parts  of  the  United  States.  Now 
the  fact  is  that  the  operatives  in  our  Southern  cotton 
factories  are  receiving  an  average  lower  wage  than 
the  operatives  in  either  the  English  or  New  England 
cotton  factories.  If  the  protective  tariff  establishes  a 
high  price   for  labor,  how  is  it  to  be  explained  that 


A   TALK    WITH    LABORERS  193 

ready-made  clothing  paying  the  very  highest  duty  re- 
quired by  the  tariff  is  manufactured  by  the  cheapest 
labor  in  the  sweat-shops  of  our  great  cities  ?  Our  labor 
is  essentially  cheap,  though  the  price  is  high  because  we 
employ  either  efficient  labor  or  employ  ordinary  labor 
assisted  by  highly  developed  machinery,  and  because 
of  the  superior  natural  resources  of  the  country  and 
the  better  methods  of  manufacture.  Another  evi- 
dence that  it  is  not  the  protective  tariff  which  estab- 
lishes our  prevailing  high  prices  for  labor  is  found  in 
the  fact  that  the  highest  priced  labor  in  our  country 
prevails  among  masons,  carpenters,  and  joiners, 
plumbers,  plasterers,  painters,  compositors,  and  other 
trades  upon  which  the  tariff  has  no  effect  whatever. 

You  will  also  observe  that  necessarily  the  protective 
tariff  can  only  affect  directly  the  price  of  wages  in 
those  employments  where  European  products  come  in 
competition  with  the  home  product  and  where  protect- 
ive duties  are  imposed  upon  the  foreign  product  to 
restrict  the  competition.  Our  protective  tariffs  are 
imposed  upon  cotton  goods,  woolen  goods,  glassware, 
pottery,  iron,  steel,  chemicals,  cement  and  a  few  other 
products.  In  the  manufactories  of  these  products 
machinery  is  used  to  an  extent  unknown  in  other  pro- 
duction in  this  country,  and  the  result  is  that  not  over 
ten  per  cent,  of  the  men  employed  in  labor  in  this  coun- 
try are  actually  engaged  in  manufacturing  products 
protected  by  tariffs.  In  1886,  at  the  request  of  the 
13 


194  THE    TARIFF   AND   THE    TRUSTS 

United  States  Secretary  of  State,  Daniel  Manning, 
three  statisticians  and  economists  of  high  standing, 
working  by  different  methods  and  conducting  their  in- 
vestigations independently,  agreed  in  the  estimate  that 
at  the  outside  the  proportion  of  workers  employed  in 
skilled  manufactories  which  were  protected  by  the 
tariff  did  not  exceed  six  or  seven  per  cent.  The  late 
Edward  Atkinson,  of  Boston,  who,  more  thoroughly 
probably  than  any  other  American,  investigated  the 
subject  of  wages  in  our  country,  prepared  in  his  book, 
entitled  "Facts  and  Figures,"  published  in  1904,  ela- 
borate tables  showing  the  number  of  men  engaged  in 
the  different  occupations  of  life  in  this  country  in  that 
year,  the  product  of  whose  labor  had  no  connection 
whatever  with  the  imports  of  manufactured  products 
from  abroad  and  who  in  no  direct  way  received  any 
benefits  from  the  tariff.  He  also  prepared  a  table 
showing  the  industries  protected  by  the  tariff  and  the 
number  of  operatives  engaged  in  those  industries,  and 
his  conclusions  in  his  own  language  are  as  follows : 
"I  think  it  will  prove  impossible  for  any  sincere  stu- 
dent of  the  subject  to  designate  one  million  persons 
out  of  the  twenty-nine  million  now  occupied  for  gain 
whose  industry  would  be  seriously  or  adversely  affect- 
ed, even  if  all  duties  on  all  foreign  imports  of  like 
kind  were  at  once  removed.  Twenty-five  million  are 
engaged  in  arts  necessary  to  the  existence  of  society 
and  which  can  neither  be  promoted  nor  retarded  by 


A    TALK    WITH    LABORERS  195 

duties  on  imports,  except  so  far  as  the  cost  of  their  liv- 
ing is  increased  by  an  ill-adjusted  or  injudicious  sys- 
tem of  taxation." 

Again,  assuming  that  you  are  an  operative  in  a 
factory  manufacturing  goods  protected  by  the  tariff, 
you  would  expect  to  find  that  the  rise  in  your  wages 
during  the  last  ten  years  would  have  been  more  rapid 
under  the  McKinley  Tariff,  which  was  enacted  in  1890, 
and  the  Dingley  Tariff  enacted  in  1897,  since  the  duties 
imposed  by  those  tariffs  were  much  higher  than  the 
duties  of  any  other  preceding  tariff.  The  duties  pre- 
vailing between  the  years  1883  and  1890  in  this 
country  on  dutiable  imports  were  only  about  41.6  per 
cent. ;  under  the  McKinley  Bill  they  were  upwards  of 
50  per  cent.,  under  the  Wilson  Bill  they  were  about  42 
per  cent.,  and  under  the  Dingley  Bill  they  have  averaged 
in  the  neighborhood  of  50  per  cent,  upon  dutiable  im- 
ports. Now  the  inquiry  is,  have  your  wages  increased 
more  rapidly  under  the  tariff  existing  under  the  Mc- 
Kinley Bill  and  the  Dingley  Bill  than  under  the  lower 
tariff  duties  existing  from  1885  to  1890?  Following 
you  will  find  a  table  prepared  from  the  publications  of 
the  American  Commissioner  of  Labor  tracing  the 
course  of  average  wages  in  67  groups  of  labor  from 
1885  until  1901  in  periods  showing  the  price  under 
these  four  different  tariffs,  the  tariff  of  1883,  the 
McKinley  Tariff  of  1890,  the  Wilson  Tariff  of  1894, 
and  the  Dingley  Tariff  of  1897  to   1901. 


196  THE   TARIFF    AND   THE   TRUSTS 

Wages  Per  Day  in  Dollars 


Occupation  1885-9 

Bakers     2.17 

Balers    (textiles)     1.04 

Blacksmiths     2.20 

Bleachers    (textiles)     1.67 

Body   makers  (carriages  and  wagons)  .2.64 

Boiler    makers     2.28 

Brakesmen    (railroads)    1.78 

Brass    finishers     2.48 

Brass    moulders    2.67 

Brewers     3.19 

Bricklayers      4.00 

Brickmakers     i  .87 

Cabinet    makers    2.28 

Carders    (textiles)     1.20 

Carpenters    and    joiners 2.31 

Clerks    2.49 

Compositors     , 2.67 

Coopers     2.79 

Cutters    (clothing)     3.18 

Cutters    (glass)     2.00 

Dressmakers     i  .63 

Dressers    (textiles)     1.98 

Dyers    (textile)     1.50 

Finishers     (textile)     1.20 

Finishers    (boots   and   shoes)    2.00 

Founders    (iron)     

Furnace  men  (foundry  and 

machinery    shops)     1.73 

Furriers     3.38 

Gasmakers     i  .65 

Glass  blowers    (bottles)     5.15 

Glass  blowers    (window  glass)    5.00 

Glaziers     2.5 1 

Glove    makers    1.33 

Grinders   (foundry  and  machinery 

shops)      2.44 

Grinders    (tools)     2.25 

Harness  and   saddle   makers 1.39 

Iron    workers    2.24 

Jewelers     2.z^ 

Joiners     1.94 

Lasters  (boots  and  shoes)    2.34 

Machinists     2. 1 6 

Masons     3-25 

Millers    (flour)     2.55 


1897- 

891-3 

1895-6 

1901 

1-57 

2.39 

2.17 

1. 17 

1.36 

1.02 

2.30 

2.20 
I-3I 

2.16 

1.88 

2.05 

2.29 

2.30 

2.28 

2.42 

2.18 

1.84 

2.13 

3.00 

2.75 

2.56 

1.69 

1.78 

3-05 

2.37 

2.45 

4.00 

4.00 

3-53 

1.76 

1.60 

1.42 

2.24 

2.98 

2.38 

1.09 

0.95 

2.26 

2.20 

2.42 

2.2^ 

1-75 

1.74 

2.7Z 

2.45 

2.63 

2.7s 

1.83 

1.42 

2.90 

3-25 

2.76 

2.00 

2.17 

2.83 

1.47 

1-45 

1. 17 

2.41 

2.09 

I.SO 

1.27 

1.69 

1. 18 

1.30 

1. 17 

3-II 

3. IS 

2.08 

2.07 

.... 

1-73 

I.7S 

2.02 

2.06 

2.19 

1.86 

1.73 

1.60 

5-15 

3-97 

S-oo 

4.00 

1.64 

1.96 

2.36 

0.71 

1. 17 

1.70 

3.11 

2.05 

2.19 

1.99 

0.73 

2.25 

1.8s 

2.53 

2.75 

1.92 

2.51 

1.48 

2.25 

2.01 

2.24 

1.80 

2.07 

2.05 

1.78 

2.96 

4.00 

3.36 

1-97 

2.13 

1.98 

A   TALK    WITH    LABORERS  IQ/ 

Wages  Per  Day  in  Dollars. — Continued 


Occupation  1885-9 

Miners   (coal)    2.69 

Painters     3.50 

Paper    makers     1.50 

Piecers    (textiles)     0.98 

Plasterers     4.00 

Plumbers     3.50 

Puddlers     3.47 

Quarrymen     2.3 1 

Riveters     1.35 

Rope  makers    1.58 

Sailmakers     2.7 1 

Ship    carpenters    2.84 

Shoemakers      2.28 

Spinners    (cotton)     1.74 

■Stereotypers     3.00 

Tanners     1.92 

Tinsmiths      3.25 

Upholsterers     3.00 

Weavers    (cotton)     1.23 

Weavers   (silk)    2.42 

Weavers   (wool)    1.57 

Wheelwrights     2.77 

Winders   (textiles) 1.28 

Woolsorters     2.73 


An  examination  of  these  sixty-seven  groups  shows  one 
thing  at  least  clearly — that  there  has  been  no  general 
upward  movement  of  wages.  In  only  some  eight 
cases  is  the  last  average  wage  higher  than  in  any  of 
the  preceding  periods ;  and,  on  the  other  hand,  in 
thirty-six  cases  the  average  for  the  period  1897-1901 
was  lower  than  the  average  of  some  one  of  the  earlier 
periods.  The  average  for  the  five  years  1 897-1 901  is 
lower  in  thirty-one  groups  out  of  forty-six  for  which 
the  figures  are  given  above  than  the  average  for  the 
five  years  1885-1889;  that  is,  in  those  industries  wages 


1897- 

I89I-3 

1895-6 

1901 

I.9I 

1.82 

3-41 

3-So 

3-04 

1.72 

3-00 

0.90 

0.68 

3-59 

4.00 

3.22 

3-50 

3-74 

3-19 

3-29 

4.50 

2.9a 

1.99 

1.63 



1.44 

I.7S 

1.40 

1.08 

2.50 

2.50 

3.00 

2.75 

3-25 

1.79 

2.00 

1.94 

I. II 

i.So 

1.79 

2.67 

2.70 

3-42 

1.67 

1.68 

2.50 

2.44 

2.02 

2.66 

1.82 

1.02 

1.36 

2.29 

1.89 

1.86 

1-35 

1.57 

1-39 

2.50 

2.75 

0.97 

I. II 

1. 13 

1. 25 

2.09 

igS  THE    TARIFF    AND    THE    TRUSTS 

were  less  than  in  the  years  before  the  United  States 
entered  upon  its  ultra- Protectionist  poHcy, 
We  tabulate  these  results  thus  : 

Total   number   of   groups 67 

Number  in  which  the  wages  for  the  last  period   (1897-1901) 

are    given 46 

Number  in  which  wages  were  highest  in  the  last  period 8 

Number  in    which   wages   in   the    last    period   are   below   the 

average  of  the  first  period  (1885-9) 31 

That  is  to  say,  that  in  two  cases  out  of  three,  wages  are 
actually  lower  in  the  last  five  years'  period  than  in  the 
period  before  the  McKinley  Tariff,  The  Board  of 
Trade  in  England,  taking  the  same  occupations  in  the 
same  years,  and  ascertaining  the  wages  in  those  same 
occupations,  find  that,  while  between  1885  and  1898, 
and  1897  and  1900,  there  was  according  to  the  above 
figures  a  rise  in  the  wages  of  American  workmen  of 
only  5.5  per  cent.,  the  wages  of  English  workmen  in 
the  same  employment  and  during  the  same  time  rose 
over  13  per  cent. 

Protectionist  writers  and  speakers  will  tell  you,  how- 
ever, that  the  tariff  keeps  out  the  foreigner's  goods, 
and  therefore  gives  you  just  so  much  more  work  to 
do.  They  will  tell  you  that  to  the  full  extent  of  the 
exclusion  of  imported  goods  our  manufacturers  will 
produce  like  goods,  and  therefore  have  more  work  for 
the  laborer.  A  more  deceptive  statement  in  its  nature 
cannot  be  found.  A  country  can  obtain  any  com- 
modities which  it  needs  in  one  of  two  ways ;  either  by 


A   TALK    WITH    LABORERS  I99 

producing  them  directly  or  by  producing  something  else 
and  exchanging  that  for  the  products  of  other  people. 
It  therefore  follows  that  the  exclusion  of  foreign  goods 
cannot  materially  increase  the  demand  for  labor  in  the 
importing  country,  since,  in  case  the  foreign  goods 
come  in,  you  must  produce  another  product  to  pay  in 
exchange  for  them.  You  would  manufacture  the 
goods  used  to  pay  for  the  goods  now  shut  out  but  which 
would  be  imported  under  lower  duties,  so  that  the 
number  of  your  day's  work  would  not  be  less.  Ex- 
change of  goods  is  not  made  between  the  United  States 
as  a  nation  and  a  foreign  country  as  a  nation,  but  be- 
tween the  people  of  the  two  countries.  Men  never 
exchange  their  products  unless  both  parties  believe 
that  they  are  benefited  by  the  transaction.  We  trade 
our  goods,  not  for  the  money  of  other  people,  but  for 
the  goods  that  other  people  can  make  cheaper  than  we 
can  make  them,  and  when  we  import  we  pay  in  the 
end  for  the  imports,  not  money,  but  other  goods.  In 
the  days  before  the  Civil  War  the  heads  of  the  house- 
hold were  in  the  habit  of  making  their  own  clothing, 
and  many  men  cobbled  their  own  footwear  and  made 
their  own  furniture.  WHiy  do  we  now  buy  our  cloth- 
ing and  our  shoes?  Simply  because  we  can  make 
something  else  with  less  work  and  dispose  of  it  ad- 
vantageously in  exchange  for  these  commodities.  To- 
day economy  in  production  depends  upon  the  division 
of  labor.     One  man  does  a  single  kind  of  work  con- 


20O  THE    TARIFF    AND    THE    TRUSTS 

tinuoiisly  in  each  process  of  manufacturing.  Now,  it 
is  exactly  the  same  when  one  country  manufactures 
its  specialty  and  exchanges  it  for  the  specialties  of 
other  countries.  The  German  excels  in  the  manu- 
facture of  chemicals  because  the  chemical  companies 
of  Germany  expend  a  large  amount  of  money  in  the 
employment  of  German  chemists  to  make  and  utilize 
discoveries  in  chemistry.  The  English  excel  in  the 
manufacture  of  cotton  because  of  certain  conditions 
of  their  climate  favorable  to  the  manufacture  of  the 
higher  priced  cotton  prints,  while  the  French  excel  in 
the  manufacture  of  fine  dress  goods  because  of  long 
experience  in  that  line.  We  in  the  United  States  excel 
in  the  manufacture  of  boots  and  shoes,  of  iron  and 
steel,  of  furniture,  of  tools  and  hardware,  and  in  many 
other  lines.  So  you  see  that  each  country  specializes, 
just  as  the  manufacturer  in  our  shops  specializes  by  a 
species  of  subdivision  of  labor.  When  we  import 
chemicals  from  Germany  and  export  our  special 
staples  in  payment  to  Germany,  we  are  applying  to 
transactions  between  the  people  of  the  two  nations 
the  same  principle  which  the  farmer  who  made  his 
necessaries  before  the  war  employs  in  swapping  his 
products  for  necessaries  now.  When  different  people 
exchange  with  each  other  those  specialties  in  which 
they  excel,  the  result  is  a  saving  of  time  and  money 
to  both  parties  in  the  transaction.  Let  me  give  you 
an  illustration:  the  Chinaman  uses  cheap  cotton  drills 


A   TALK    WITH    LABORERS  201 

for  clothing,  and  it  would  take  a  month  to  make 
sufficient  cotton  cloth  for  a  suit  of  clothes  upon  one 
of  their  antiquated  looms,  but  the  amount  of  labor 
which  they  expend  in  growing  a  quantity  of  tea  is 
probably  only  one-thirtieth  of  the  amount  which  would 
be  required  in  growing  the  same  amount  of  tea  in  this 
country.  Now  we  can  make  a  sufficient  amount  of 
cloth  for  the  suit  of  a  Chinaman  in  our  Southern 
factories  with  one-thirtieth  the  amount  of  labor  re- 
quired by  the  Chinaman  to  make  the  cloth.  Will  it 
not  pay  us  both  to  exchange  cotton  cloth  for  tea? 
Trade  between  the  people  of  different  nations  is  good 
in  its  inmost  nature  and  results.  It  always  was  good, 
and  it  always  will  be  good.  It  has  been  the  cause  of 
every  advance  of  civilization  the  world  over.  Gov- 
ernment never  trades ;  what  it  does  is  to  interrupt  and 
forbid  trade  for  the  benefit  of  special  interests.  Our 
government,  by  such  laws  as  the  Dingley  Tariff,  may 
limit  and  lessen  and  mangle  trade,  but  it  is  beyond  its 
power  to  really  foster  or  upbuild  it.  Different  coun- 
tries have  different  climates  and  different  conditions 
for  the  development  of  manufacture,  so  that  trade  be- 
tween different  peoples  is  economical  and  sometimes 
absolutely  necessary.  Bleaching  has  always  been  an 
important  part  of  the  linen  industry,  and,  owing  to  the 
admitted  superiority  of  the  Irish  bleach,  a  consider- 
able quantity  of  linen  is  sent  from  Belgium,  France 
and  Germany  to  be  bleached  in  Ireland  and  returned 


202  THE    TARIFF    AND   THE    TRUSTS 

to  those  countries  for  sale.  The  excellence  of  the  Irish 
bleach  is  due  to  its  humid  temperate  climate.  The 
people  of  Ireland  import  flax  from  other  countries. 
The  flax  is  spun  in  Ireland  into  yarn  and  sold  back  to 
France  and  Belgium.  In  the  latter  countries  it  is 
woven  into  linen,  which  is  sent  back  to  Ireland  to  be 
bleached  and  finished,  and  then  it  goes  back  again  to 
the  countries  whence  it  came.  Free  trade  between 
countries  is  the  right  principle,  because  it  gives  each 
country  the  command  of  the  world's  products  so  that 
it  can  specialize  in  those  lines  for  which  it  is  best 
suited  and  exchange  them  for  the  products  which  it  is 
least  able  to  produce.  The  protectionists  tell  you, 
however,  that  we  pay  for  foreign  goods  in  money.  I 
tell  you  that  we  scarcely  ever  pay  for  foreign  goods  in 
money  at  the  end  of  the  transaction.  We  pay  for 
foreign  goods  by  sending  to  them  our  boots  and  shoes, 
or  iron  and  steel,  or  furniture,  or  hardware,  or  some 
other  product  in  the  manufacture  of  which  we  excel 
foreign  countries.  Foreign  trade  in  the  main  is  simply 
swapping  goods  for  goods,  and  the  goods  which  the  pro- 
tected manufacturer  by  tariffs  keeps  out  of  our  ports 
are  simply  goods  which  if  they  were  admitted  to  our 
ports  without  duties  would  be  paid  for  by  your  labor 
in  the  manufacture  of  other  goods  to  trade  therefor, 
and  the  amount  and  value  of  your  labor  would  not 
thereby  be  decreased.  We  do  not  always  pay  for  im- 
ported goods  by  exporting  goods  to  the  same  country 


A   TALK    WITH    LABORERS  203 

from  which  we  import  the  purchased  goods,  but  in 
such  case  we  do  pay  for  them  by  exporting  goods  to 
other  countries,  and  bills  of  exchange  for  imported 
goods  to  England  are  frequently  paid  through  the 
banks  of  South  America  or  Asia  or  South  Africa,  and 
goods  shipped  there  reduce  a  balance  against  us  in 
England  or  France  or  Germany.  It  is  simply  because 
the  transaction  of  trade  with  foreign  countries  is  a 
complicated  one,  and  on  the  face  of  it  appears  often  to 
be  an  exchange  of  goods  for  money,  that  protectionists 
have  so  long  deceived  the  laboring  man.  England, 
Germany,  and  France  all  import  more  goods  than  they 
export  and  increase  in  wealth  with  rapidity  and  the 
fact  that  they  can  afford  to  import  so  many  is  simply 
an  evidence,  not  of  weakness,  but  of  wealth.  So  you 
see  that  if  the  restrictions  of  the  tariff  were  removed 
and  the  imports  of  foreign  goods  increased  that  these 
increased  imports  would  be  paid  for  by  your  labor 
through  increased  exports.  You  would  be  making 
goods  in  the  manufacture  of  which  you  excel  foreign 
workmen  to  pay  for  goods  in  the  manufacture  of 
which  they  excel  you,  and  the  result  would  be  a  saving 
of  labor  to  both  of  you.  The  shut  door  prevents  the 
going  out  of  goods  as  much  as  the  coming  in  of  goods, 
and  the  open  door,  if  it  allows  coming  in,  also  allows 
the  going  out  of  goods.  In  other  words,  we  cannot 
become  great  exporters  unless  we  become  great  im- 
porters. 


204  THE    TARIFF    AND   THE    TRUSTS 

The  protectionists  tell  you  that  protective  tariffs  in- 
crease the  numbers  of  men  employed  in  manufacturing. 
The  number  of  men  employed  in  the  shops  of  manu- 
facturers in  recent  years  has  not  increased,  and  I  will 
prove  it  to  you.  In  the  tariff  of  1883  the  duties  were 
low  compared  with  the  McKinley  Bill  of  1890  and  the 
Dingley  Bill  of  1897.  The  duties  of  the  Wilson  Bill, 
passed  in  1894,  w^ere  a  little  higher  than  the  duties 
under  the  act  of  1883.  According  to  the  protection- 
ists' contention,  your  number  employed  in  the  factories 
ought  to  have  increased  rapidly  since  1890  under  the 
McKinley  Bill,  the  Wilson  Bill,  and  the  Dingley  Bill. 
What  are  the  facts?  The  following  table  will  show 
the  number  of  men  employed  in  the  factories  between 
1880  and  1900  and  the  ratio  of  increase: 

1880  1890  1900 

Number   of  men 2,732,000  4,712,000  5,719,000 

Absolute     increase 1,980,000  1,007,000 

Percentual    increase T2%  21% 

Now  let  us  consider  the  increase  in  the  total  sums  paid 
in  wages  and  salaries.     The  figures  are : 

1880  1890  1900 

Wages   and   salaries.  .$947,000,000     $2,283,000,000     $2,735,000,000 

Absolute    increase     1,336,000,000  452,000,000 

Percentual  increase   141%  11% 

That  is,  in  1900,  after  ten  years  of  high  protection,  on 
the  average  lower  wages  were  being  paid  than  in  1890. 
From  1880- 1 890  the  total  of  wages  and  salaries  in- 
creased much  more  than  the  number  of  people  em- 


A   TALK    WITH    LABORERS  20$ 

ployed,  from  1890  to  1900  it  increased  much  less. 
Now  what  do  these  figures  mean?  They  mean  simply 
that  the  collective  force  in  factories  is  not  increasing 
in  the  same  ratio  as  the  number  of  men  employed  in 
non-protected  industries.  The  protected  trust  is  most 
frequently  found  in  those  industries  in  which  the  use 
of  machinery  is  carried  to  the  utmost  limit  possible, 
and  in  which  as  a  consequence  less  human  labor  is  re- 
quired to  obtain  a  given  product  value.  The  pro- 
tected manufacturers  are  seeking  with  the  greatest 
vigor  to  make  the  machines  take  the  place  of  men,  for 
machines  do  not  eat  and  machines  do  not  strike.  The 
operatives  in  textile  factories  and  in  all  highly  organ- 
ized manufactories  number  fewer  and  fewer  as  the 
machinery  becomes  more  automatic,  until  at  last  it 
will  become  one  great  combination  of  mechanism  in 
which  a  few  experts  will  keep  the  machines  in  order 
and  but  few  operatives  will  be  found  in  the  weaving 
room. 

Now  I  wish  to  tell  you  what  will  increase  the  de- 
mand for  your  labor.  The  removal  of  these  high 
duties  will  multiply  many  fold  the  demand  for  your 
labor.  It  will  accomplish  that  result  in  just  this  way. 
Thousands  of  manufacturers  in  this  country  are  unable 
to  export  their  products  to-day  because  of  the  high 
prices  which  they  have  to  pay  for  their  raw  material, 
their  steel,  their  iron,  their  tin  plate,  their  wire,  their 
brass,  their  lead,  their  hides,  their  coal  and  every  ele- 


206  THE    TARIFF    AND   THE    TRUSTS 

mental  product  which  is  used  in  their  factories.  With 
our  superior  machinery  and  our  more  intelligent  labor 
and  with  free  raw  materials  in  manufacturing  we 
could  in  twenty  years  lead  the  world  in  exporting. 
Few  manufacturers  understand  fully  the  reason  why 
they  cannot  export,  and  very  few  politicians  spend  any 
time  in  studying  the  subject.  The  result  is  that  the 
American  people,  the  most  vigorous,  enterprising  peo- 
ple in  the  world,  with  superior  machinery,  with  intel- 
ligent mechanics  in  their  factories,  and  with  large 
supplies  of  raw  material,  are  comparatively  as  far  be- 
hind England  and  Germany  in  exporting  manufactured 
products  as  China  is  behind  the  American  people.  The 
comparative  exports  of  manufactured  products  in  the 
year  1902  of  the  leading  industrial  countries  of  the 
world  were  as  follows : 


Great    Britain £230,000,000 

Germany    £150,000,000 

France     £  85,000,000 

United   States    £  80,000,000 


The  United  Kingdom  of  Great  Britain,  with  a  popu- 
lation of  about  40,000,000  of  people  in  the  year  1902, 
exported  £230,000,000  of  manufactured  articles,  while 
the  United  States  with  a  population  of  80,000,000  ex- 
ported £80,000,000.  Taking  into  account  the  popu- 
lation the  exports  of  manufactured  articles  from  the 
United  Kingdom  of  Great  Britain  in  1902  was  about 
£6  per  head,  while  the  exports  of  manufactured  articles 


A   TALK    WITH    LABORERS  20/ 

from  the  United  States  amounted  to  £i  per  head. 
Germany,  with  54,000,000  people  and  with  a  duty  of 
25  per  cent,  upon  dutiable  imports,  exported  nearly 
twice  as  much  as  we  exported,  while  France,  which  is 
known  throughout  the  world  as  the  dying  nation  of 
Europe,  with  a  stationary  population  of  38,000,000, 
exported  £85,000,000  of  manufactured  articles.  We 
ought  to  be  exporting  at  least  a  billion  and  a  half  dol- 
lars' worth  of  manufactured  products  every  year,  and 
we  would  be  exporting  that  amount  were  it  not  for 
the  fact  that  our  antiquated  tariff  by  shutting  out  im- 
ports shuts  in  exports  and  by  imposing  duties  upon  the 
raw  material  of  manufacture  makes  the  price  thereof 
so  high  that  our  manufacturers  cannot  undersell  their 
competitors  except  in  a  few  specialties. 

So  far  I  have  been  discussing  with  you  the  question 
of  labor,  as  though  the  nominal  price  paid  to  you  for  a 
day's  labor  was  the  real  wage  which  you  received. 
This  conception  of  the  price  of  your  day's  wage  is  en- 
tirely erroneous.  The  real  price  of  labor  is  the  amount 
which  you  can  buy  of  the  necessaries  of  life  with  the 
day's  wage.  Your  prosperity  is  not  measured  by  the 
price  of  the  day's  labor,  but  by  what  you  have  left  of 
that  price  after  you  have  bought  the  necessaries  for 
yourself  and  family  for  that  day.  The  money  price  of 
the  day's  labor  is  only  a  means  devised  by  men  to 
avoid  the  inconvenience  of  paying  you  for  your  day's 
labor  in  kind.     The  object  of  work  on  the  part  of 


208  THE    TARIFF    AND   THE    TRUSTS 

every  man  is  to  obtain  the  necessaries  of  life  for  him- 
self and  his  family.  If,  instead  of  receiving  two  or 
three  dollars  a  day,  you  were  to  receive  a  pair  of  shoes 
or  a  coat,  you  would  not  be  deceived  in  the  price  of 
that  day's  labor.  Now,  between  July  i,  1897,  and  the 
1st  day  of  June  of  the  present  year,  the  price  of  the 
necessaries  of  life,  according  to  Dun's  Mercantile 
Agency  Reports,  have  increased  in  cost  47.4  per  cent., 
so  that  even  if  your  wages  during  that  same  period 
had  been  increased  say  25  per  cent.,  you  have  actually 
been  deprived  by  the  protective  tariff  and  the  trusts  of 
upwards  of  20  per  cent,  of  what  your  real  wages  ought 
to  have  been.  The  manufacturer  may  increase  the 
amount  of  your  daily  wage,  but  so  long  as  the  trusts 
increase  the  price  of  the  necessaries  of  life  more  rapid- 
ly than  he  increases  your  wage,  you  are  really  re- 
ceiving a  lower  wage  than  before. 

The  tariff  taxes  bear  much  more  heavily  upon  you, 
because,  under  the  McKinley  Bill  and  the  Dingley 
Bill,  many  duties  were  made  specific,  so  much  per 
pound,  per  square  yard  and  per  bushel,  and  the  result 
is  that  the  lower  priced  grades  of  goods  bear  extreme- 
ly high  duties  in  comparison  with  the  more  costly 
grades.  You  will  find  in  this  volume  in  the  history  of 
our  tariff  a  fuller  description  of  the  operation  of  these 
specific  duties.  So  high  are  they  upon  the  lower 
grades  of  imported  articles  that  their  importation  is 
prohibited,  and  the  manufacturer  is  left  free  to  charge 


A   TALK    WITH    LABORERS  2O9 

you  what  he  pleases.  Taking  rent,  clothing,  etc.,  into 
consideration,  even  the  apparent  advantage  enjoyed 
in  the  high  prices  of  American  wage  earners  disap- 
pears. According  to  a  report  in  1903,  Mr.  Carroll 
D.  Wright,  the  Director  of  the  United  States  Labor 
Department,  estimates  the  cost  of  living  in  our  own 
and  European  countries,  not  in  percentages  of  wages, 
but  in  the  number  of  days'  earnings  absorbed  by  the 
purchase  of  the  necessaries  of  life.  By  such  a  method 
he  comes  to  the  conclusion  that  the  number  of  work- 
ing days  of  a  man  required  to  cover  the  cost  of  hous- 
ing, food,  clothing,  lighting,  heating,  and  taxes  of  the 
average  family  are  in 

England     205  days 

United    States 225  days 

France     231   days 

Germany    240  days 

Russia    286  days 

Italy    290  days 

So  you  will  see  that  it  takes  the  wages  of  the  American 
laboring  man  for  twenty  days  to  cover  the  additional 
cost  of  housing,  food,  clothing,  lighting,  heating,  and 
taxes  over  the  cost  to  the  English  workingman. 

The  protectionists  tell  you  that  the  amount  of  the 
duty  on  a  foreign  product  which  comes  into  competi- 
tion with  a  domestic  product  is  determined  by  the  dif- 
ference between  the  labor  cost  of  manufacturing  the 
product  in  this  country  and  abroad,  and  is  a  measure 
of  the  difference  in  value  between  your  labor  and  that 
14 


210  THE    TARIFF    AND   THE    TRUSTS 

of  the  foreign  laborer  in  the  same  Hne  of  work.  This 
is  a  palpable  mis-statement.  There  has  scarcely  been 
a  case  since  1864  where  the  domestic  product  was  pro- 
tected that  the  amount  of  the  duty  imposed  upon  the 
competing  foreign  product  was  not  actually  more  than 
the  whole  labor  cost  of  the  manufacturer  in  making 
the  domestic  product.  Let  me  give  you  a  few  glaring 
instances.  The  duty  on  iron  ore  is  40  cents  per  ton, 
the  duty  on  pig  iron  is  $4  per  ton,  the  minimum  duty 
on  steel  billets  is  $6.72  per  ton,  and  the  duty  on  steel 
rails  is  $7.84  per  ton.  Now  the  United  States  Steel 
Trust  owns  the  deposits  of  ore,  transports  it  from  the 
Lake  Superior  mines  by  its  own  railways  and  steam- 
ers, and  converts  it  into  pig  iron  and  billets  and  steel 
rails,  the  amount  of  all  the  tariff  duties  being  several 
times  the  amount  of  the  entire  labor  cost  in  making  a 
ton  of  steel  rails.  In  1870  Congress  imposed  duties 
upon  steel  rails  of  $28  per  gross  ton,  and  this  duty  con- 
tinued until  1883.  By  1877  the  average  price  of  steel 
rails  in  England  was  only  a  little  over  $31  per  ton,  and 
it  continued  at  about  that  price  until  1881.  The  own- 
ers of  steel  rails  during  this  period  owned  the  patent 
for  the  use  of  the  Bessemer  process  and  could  manu- 
facture steel  rails  as  cheaply  as  the  English  manu- 
facturers, and  yet  for  the  years  between  1877  and  1883 
they  sold  their  steel  rails  from  sixty-one  to  sixty-seven 
dollars  per  ton,  about  twice  the  value  of  the  English 
rails  delivered  in  New  York.     Professor  Taussig,  in 


A    TALK    WITH    LABORERS  211 

his  "Tariff  History  of  the  United  States,"  says  of  this 
period :  "The  domestic  producers  of  steel  rails  secured 
enormous  profits  of  loo  per  cent,  and  more  on  their 
capital  during  these  years."  The  labor  cost  of  a  ton 
of  wire  rods  in  the  years  immediately  following  the 
McKinley  Tariff  was  $1.95,  yet  the  duty  was  $12  a  ton, 
more  than  six  times  the  labor  cost.  The  whole  labor 
cost  of  a  yard  of  four-ounce  flannel  in  the  eighties  was 
3  cents  a  yard,  yet  the  duty  under  the  Tariff  Act  of 
1883  was  8  cents  a  yard,  and  the  AIcKinley  Act  put  it 
still  higher.  The  sugar  manufacturer  is  protected  on 
his  refined  sugar  to  the  amount  of  12^  cents  per 
hundredweight.  The  labor  cost  of  refining  sugar  is 
not  to  exceed  10  cents  a  hundred  pounds,  and  the 
American  consumer  pays  in  the  increased  prices  for 
sugar  more  than  the  entire  labor  cost  of  refining.  The 
census  of  1900  shows  that  the  manufactured  products 
of  the  country  for  that  year  were  about  $13,000,000,- 
000,  and  Carroll  D.  Wright  gives  lyYz  per  cent,  of  the 
cost  of  the  manufactured  article  as  the  proportion 
which  the  laborer  received.  Seventeen  and  one-half 
per  cent,  of  the  cost  of  the  manufactured  article  goes 
to  labor,  and  the  average  duty  upon  dutiable  foreign 
products  which  compete  with  the  domestic  products  is 
about  50  per  cent.  Stated  in  another  way,  your  em- 
ployers get  duties  to  the  amount  of  an  average  of 
about  50  per  cent,  upon  dutiable  imports  imposed  for 
the  purpose   of  covering  the  difference  between   the 


212  THE    TARIFF    AND   THE   TRUSTS 

price  of  your  labor  and  the  foreign  labor,  while  17^ 
per  cent,  of  the  cost  of  the  manufactured  article  is 
the  entire  labor  cost  of  the  article.  The  American 
people  pay  the  trusts  in  increased  price  more  than  the 
entire  labor  cost  of  the  article  for  the  purpose  of  tak- 
ing care  of  the  difference  between  the  cost  of  your 
labor  and  that  of  your  foreign  competitor ;  and  that  is 
not  all,  you  do  not  get  a  penny's  benefit  from  it. 

This  whole  system  of  duties  is  sustained,  according 
to  the  manufacturers,  for  your  exclusive  benefit.  You 
are  the  sole  beneficiaries  of  this  benevolent  legislation, 
but  the  commodity  which  you  have  to  sell  is  your  labor. 
Your  competitor  is  the  foreign  laborer,  and  unfortu- 
nately labor  is  upon  the  free  list.  If  the  manufacturer 
is  so  interested  in  your  behalf,  why  does  he  not  aid  you 
in  the  only  possible  way  of  protecting  your  labor,  and 
that  is  to  procure  a  law  restricting  or  prohibiting  im- 
migration, thus  destroying  competition  with  the  foreign 
laborers  who  come  to  this  country  in  the  number  of 
about  a  million  a  year  and  take  your  jobs.  In  that 
manner,  and  in  that  manner  only,  can  the  price  of  labor 
be  protected.  I  trust,  however,  that  laboring  men  will 
never  attempt  to  prohibit  immigration.  The  attitude 
of  labor  should  be:  "We  do  not  wish  favors  from 
government,  and  we  will  see  to  it  that  other  men  do 
not  get  favors.  We  will  vote  against  any  party  which 
favors  special  legislation  or  special  privileges  of  any 
name  or  nature." 


A   TALK    WITH    LABORERS  2I3 

The  price  of  your  day's  labor  is  higher  than  that  of 
the  laboring  men  of  other  countries  for  reasons  en- 
tirely distinct  and  separate  from  the  effect  thereon  of 
protective  tariffs.  Your  competitors  in  Continental 
countries  can  well  be  regarded  as  representing  pauper 
labor,  but  how  has  this  pauper  labor  been  produced? 
It  has  simply  been  produced  by  carrying  out  in  Europe 
for  centuries  the  protective  policy.  This  policy  has 
long  existed  in  European  countries,  not  only  between 
different  countries,  but  between  cities  and  counties 
and  divisions  of  the  same  county.  The  protective 
policy  until  the  last  century  hedged  in  every  city  in 
Germany,  Austria,  Italy  and  France.  A  peasant  of 
France  could  not  exchange  the  product  of  his  labor 
with  the  peasant  in  a  neighboring  province.  The 
manufacture  of  commodities  was  confined  to  the 
guilds.  The  whole  policy  of  those  countries  was 
restrictive  and  protective  in  its  nature.  Trade  was  re- 
garded as  a  monster,  and  barriers  against  it  were  set 
up  on  every  highway.  The  same  condition  exists  in 
China  to-day,  and  did  exist  in  Japan  until  recent  years. 
Wherever  it  has  existed  laboring  men  have  been  little 
better  off  than  serfs,  and  are  even  to-day  but  little  bet- 
ter off  than  serfs.  To-day  throughout  protected  Ger- 
many and  Austria  almost  every  city  has  its  markets  for 
the  sale  of  dog  and  horse  meat.  Herr  Richard  Calwer, 
in  an  excellent  book  entitled  "The  Commercial  Year 
1902,"  recently  published  by  Gustav  Fischer,  of  Jena, 


214  THE    TARIFF   AND   THE    TRUSTS 

tells  US  that  in  Plauen,  the  center  of  the  lace  curtain 
industry  of  Germany,  the  consumption  of  horses  and 
dogs  as  articles  of  food  increased  largely  in  the  year 
1902.  Let  us  quote  Herr  Calwer :  "In  some  towns  the 
slaughter  of  horses  has  greatly  augmented.  Thus,  in 
Beuthen,  in  Upper  Silesia,  the  increase  amounted  to 
200  per  cent. ;  in  Rostock,  80 ;  Brandenburg-on-the- 
Havel,  'J2;  Frankfort,  50;  Barmen,  w\  Wurzburg, 
40;  Kaiserslautern,  39;  Wiesbaden,  38;  Leipzig  and 
Konigsberg,  ^i/  per  cent.  The  demand  for  horseflesh 
in  Berlin  advanced  so  greatly  that  the  horse-slaughter- 
ers were  compelled  to  pay  15  to  20  per  cent,  more  for 
animals  than  previously,  and  in  consequence  the  prices 
of  horseflesh  and  horse  sausages  rose.  The  Berlin 
horse-slaughterers,  who  usually  satisfy  their  require- 
ments in  Berlin  and  neighborhood  without  any  diffi- 
culty, were  compelled  to  send  out  buyers,  who  traveled 
the  province  buying  horses  for  slaughter."  Berlin  had 
46  markets  in  1904  for  the  sale  of  horseflesh  and 
slaughtered  11,900  horses  for  food.  In  Vienna  no 
fewer  than  20,000  horses  are  slaughtered  every  year 
for  human  food,  and  these  conditions  are  the  direct 
result  of  centuries  of  special  privilege,  restricted  in- 
dustry, and  terrible  injustice.  These  countries  are 
densely  populated.  In  England,  as  we  have  seen,  the 
population  is  558  persons  to  the  square  mile,  while  the 
population  in  our  own  country  will  probably  not  exceed 
25  persons  to  the  square  mile.     The  day's  wage  in  this 


A   TALK    WITH    LABORERS  215 

country  for  this  reason  has  always  been  high  in  times 
of  low  tariffs  as  well  as  high  tariffs.  This  range  of 
wages  is  due  to  the  immense  natural  resources  of  the 
country  and  to  the  energy  and  intelligence  with  which 
these  resources  have  been  utilized  by  our  manufactur- 
ers and  industrial  leaders.  We  started  with  a  new 
continent,  with  land  had  for  the  asking,  with  natural 
wealth  unmeasurable,  with  cities  to  be  built  and  rail- 
ways to  be  constructed,  all  of  which  has  made  a  great 
demand  for  labor.  The  price  of  labor  depends,  not 
upon  protective  tariffs,  but  upon  the  energy  and  in- 
telligence of  the  laborer,  the  demand  and  supply  of 
labor,  and  the  product  of  a  day's  labor  which  is  greatly 
increased  by  our  use  of  improved  machinery.  We 
have  a  country  about  as  large  as  Europe  with  every 
variety  of  climate  and  after  a  hundred  years  its  rich- 
ness remains  unexhausted.  We  have  absolute  free 
trade  between  upwards  of  fifty  states  and  territories 
in  this  great  domain.  The  area  of  our  farms  in  the 
West  is  large,  and  more  machinery  is  used  in  planting 
and  harvesting  crops  than  in  any  other  country.  Our 
invention  of  labor-saving  machines  almost  equals  the 
whole  of  those  of  the  rest  of  the  world.  We  have 
gathered  together  from  every  part  of  the  world  the 
bravest  and  the  most  energetic  of  men.  These  are 
the  reasons  for  high-priced  labor  in  this  country,  and 
these  are  the  reasons  why  it  will  continue  in  the  future. 
Charles   Dickens   wrote   from    Boston   in   January, 


2l6  THE   TARIFF   AND   THE   TRUSTS 

1842 :  "There  is  no  man  in  this  town  or  in  this  State  of 
New  England  who  has  not  a  blazing  fire  and  a  meat 
dinner  every  day  of  his  life,  A  flaming  sword  in  the 
air  would  not  attract  so  much  attention  as  a  beggar  in 
the  streets."  Now  let  us  see  how  the  scene  has 
changed.  In  December,  1894,  Mr.  John  Burns  told 
the  citizens  of  New  York  that  his  observations  had 
shown  him  that  the  houses  in  Whitechapel  itself — the 
poorest  quarter  in  London — were  clean,  wholesome, 
and  luxurious  compared  with  the  horrible  tenements  in 
which  lived  the  workers  of  the  chief  city  of  the  United 
States.  The  marked  change  in  the  condition  of  labor 
did  not  appear  until  about  1873.  Since  that  time, 
under  high  protection,  the  condition  of  our  laboring 
men  has  been  steadily  moving  toward  the  condition  of 
labor  in  Europe.  The  cause  is  perfectly  apparent. 
Our  method  of  indirect  taxation  by  the  imposition  of 
duties  bears  with  great  severity  upon  the  poor.  It  is 
a  tax  on  what  men  eat  and  drink  and  wear  rather  than 
on  what  they  possess,  and  the  average  laboring  man, 
whose  entire  property  will  not  perhaps  sell  for  $1000, 
pays  about  as  much  tax  as  the  wealthier  man  worth  a 
hundred  times  more.  Alexander  Hamilton,  under 
the  title  of  "Publius  Crassus,"  said  of  protection: 
"Protection,  to  be  available,  must  be  got  out  of  the 
belly  and  back  of  the  great  mass  of  the  people." 
Richard  Cobden  in  1841,  before  the  House  of  Com- 
mons, said  of  the  Corn  Law :  "The  family  of  a  noble- 


A   TALK    WITH    LABORERS  21/ 

man  pays  to  the  bread  tax  about  one  halfpenny  of 
every  hundred  pounds  of  his  income  while  the  effect 
of  the  tax  on  the  family  of  the  laboring  man  was  not 
less  than  twenty  per  cent."  Every  particle  of  clothing 
on  your  body,  from  the  boots  on  your  feet  to  the  hat 
upon  your  head,  without  one  single  exception,  costs 
you  from  fifty  to  one  hundred  and  fifty  per  cent,  more 
than  it  would  without  the  tariff.  The  trust  sits  by 
your  fire  and  your  table,  taxes  every  piece  of  glass, 
cutlery  and  pottery  in  your  house,  makes  you  pay  trib- 
ute upon  every  piece  of  wool,  cotton,  and  furniture 
in  your  home,  and  robs  you  steadily  day  in  and  day  out 
by  its  excessive  prices.  Remember  that  this  increased 
price  does  not  go  to  sustain  the  government.  More 
than  19-20  of  it  at  least  goes  into  the  treasury  of  the 
trust.  Even  now  in  ten  thousand  villages  and  cities 
all  over  this  land  your  wives  are  in  the  markets  with 
your  wages  in  their  hands  buying  a  few  comforts  in 
the  shape  of  cotton  or  woolen  goods,  sugar,  soap, 
dress  goods,  carpets,  glassware,  pottery,  cutlery,  or 
furniture,  and  paying  therefor  from  fifty  to  two  hun- 
dred per  cent,  over  the  value  of  the  imported  article 
without  duties,  about  every  penny  of  which  goes  into 
the  treasury  of  the  trust.  In  Europe  they  say  that 
every  peasant  has  to  carry  upon  his  shoulders  a  soldier. 
Our  standing  army  compared  with  European  coun- 
tries is  comparatively  small,  but  you  gentlemen  have 
to  carry  upon  your  shoulders  a  brood  of  trusts  which 


2l8  THE    TARIFF   AND   THE    TRUSTS 

plunder  you  for  private  purposes  to  an  amount  which 
no  European  government  ever  taxed  its  subjects. 
"Look,"  say  the  protectionists,  "at  the  workingmen  in 
free-trade  England  and  think  how  much  better  off 
you  are."  The  difference  is  that  their  condition  has 
been  steadily  improving,  while  your  condition  has  been 
steadily  growing  worse.  The  average  weekly  wages 
of  labor  in  the  skilled  trades  in  London  in  1840  was 
23s.  id.,  and  in  1903  it  was  42s.  The  same  increase  has 
taken  place  throughout  the  whole  of  Great  Britain, 
while,  better  than  this,  the  price  of  the  necessaries  of 
life  has  decreased  about  one-half  during  the  same 
period.  Are  you  laboring  men  afraid  of  free  trade 
or  anything  else  that  is  free?  Five  hundred  years  ago 
the  laboring  men  of  the  world  were  serfs  and  slaves. 
The  right  of  the  laboring  man  to  his  day's  labor  is  the 
result  of  a  sea  of  blood.  From  scaffold  to  scaffold 
and  from  stake  to  stake  through  five  hundred  years  a 
thousand  martyrs  have  carried  forward  the  torch  of 
liberty,  and  you  are  free  to-day  and  own  your  day's 
wage,  your  home  and  all  that  you  count  dear  because 
of  their  sacrifices.  Industrial  freedom  and  political 
freedom  are  the  life-blood  of  labor.  Never  fear  free- 
dom in  any  form,  for  freedom  to  you  is  life  and  hope 
and  everything  that  goes  to  enlighten  and  ennoble.  In 
1846,  on  the  very  night  when  the  House  of  Lords  com- 
municated to  the  Commons  that  it  had  passed  the  law 
repealing  the  duties  on  corn,  the  landowners  of  Eng- 


A    TALK    WITH    LABORERS  219 

-land  in  the  House  of  Commons,  indignant  with  Sir 
Robert  Peel  for  taking  away  from  them  the  right  to  tax 
the  poor  of  England,  combined  with  his  adversaries 
and  defeated  him  upon  an  important  measure.  He 
resigned  his  office,  and  in  his  speech  to  the  Commons 
said,  "I  shall  leave  a  name  execrated  by  every  monop- 
olist, who,  from  less  honorable  motives,  maintains  pro- 
tection for  his  own  individual  benefit ;  but  it  may  be 
that  I  shall  leave  a  name  sometimes  remembered  with 
expressions  of  good  will  in  those  places  which  are  the 
abode  of  men  whose  lot  it  is  to  labor,  and  to  earn  their 
daily  bread  by  the  sweat  of  their  brow — a  name  re- 
membered with  expressions  of  good  will,  when  they 
shall  recreate  their  exhausted  strength  with  abundant 
and  untaxed  food,  the  sweeter  because  it  is  no  longer 
leavened  by  a  sense  of  injustice."  Years  after,  thou- 
sands of  English  workingmen,  each  bringing  his  small 
contribution,  erected  a  monument  to  his  memory,  and 
placed  upon  it  this  inscription :  "He  gave  cheap  bread 
to  the  poor  of  England." 


CHAPTER  VII 


A   TALK    WITH    FARMERS 


I  WISH  to  address  a  few  plain  words  to  you,  not  as 
Republicans  nor  as  Democrats,  but  as  thoughtful  men 
interested  in  your  own  welfare  and  the  permanent 
welfare  of  your  country.  If  you  read  these  words 
through  the  eyes  of  your  political  prejudices  they  will 
have  been  written  in  vain,  for  no  sophism  is  too  gross 
to  delude  minds  distempered  by  party  spirit  and  no 
truth  is  strong  enough  to  convince  them.  It  matters 
not  whether  you  are  Republicans  or  Democrats. 
Frequently  have  the  leaders  of  both  these  parties  de- 
ceived you.  A  Democratic  Congressman  once  asked 
Galusha  A.  Grow  to  attend  a  committee  meeting  when 
a  contested  seat  case  was  to  be  heard.  "Is  he  one  of 
your  rascals  or  one  of  our  rascals?"  responded  Mr. 
Grow.  It  is  of  little  importance  for  which  set  of 
rascals  you  cast  your  vote,  since  without  doubt  many 
of  both  parties  are  rascals  and  have  been  aiding  the 
manufacturers  and  the  trusts  to  deceive  and  wrong 
you  for  years.  Your  Congressman,  as  a  rule,  spends 
his  time  in  Congress  caring  for  the  interests  of  great 
corporations  and  trusts,  and  then  comes   around  to 

220 


A  TALK    WITH    FARMERS  231 

you  once  each  two  years  gushing  with  enthusiasm 
and  giving  you,  as  the  boys  say,  "a  heap  of  taffy." 
He  has  a  bucketful  of  patriotism  for  the  campaign 
and  an  open  hand  in  Congress  for  every  trust  and  pro- 
tected interest  that  applies.  "The  more  you  get  out 
of  your  country,  the  sweeter  it  is  to  die  for  it,"  says 
Sam  Slick,  and  "the  more  you  get  out  of  politics  the 
more  valuable  it  is  to  be  loyal  to  the  trusts,"  says  your 
member  of  Congress  in  his  secret  heart,  while  he  talks 
to  you  about  the  greatness  of  your  country  and  the 
glory  of  your  flag.  "Boys,"  said  a  country  school- 
ma'am  on  Decoration  Day,  "do  you  know  what  that 
flag  is  on  the  wall  for  to-day?"  Up  goes  the  hand  of 
a  little  fellow,  and  he  responds,  "Yes'm,  it's  to  hide  the 
dirt."  The  flag  is  waved  to  the  echo  of  pulmonary 
eloquence  every  two  years  by  men  who  by  this  means 
are  trying  to  hide  the  dirt.  I  am  bound  to  tell  you  the 
truth,  and  it  will  not  sound  like  flattery,  for  the  truth 
is  that  you  farmers  are  veritable  sheep  from  whom 
every  one  snatches  as  much  wool  as  he  can  tear  off,  so 
that  not  infrequently  you  are  completely  fleeced.  These 
seem  to  be  harsh  words,  but  they  are  not  so  intended. 
Even  though  you  are  indignant  at  my  plain  speaking, 
if  that  indignation  arouses  you  to  examine  carefully 
this  question  and  to  talk  it  over  at  your  fireside,  with 
your  neighbors,  and  at  your  grange,  I  am  willing  to  be 
the  subject  of  your  ill-feeling.  You  have  been  treated 
by  our  government  so  unjustly  for  the  last  forty  years 


222  THE    TARIFF    AND   THE    TRUSTS 

that  nothing  short  of  plain  speech  could  do  the  subject 
justice. 

Forty  years  ago  the  farmers  made  their  candles, 
soap,  lard,  and  tallow,  smoked  their  hams,  and  spun 
the  yarn  for  their  clothing ;  this  has  all  passed  away 
because  ingenious  labor-saving  machines  do  all  these 
things  now  a  thousand  times  easier  than  they  were 
done  in  the  olden  day.  Immersed  in  your  work,  you 
have  failed  to  appreciate  that  the  trusts  are  actually 
charging  you  more  for  thousands  of  necessaries  of  life 
now  made  by  machines  than  you  paid  many  years 
ago.  You  cannot  mention  an  article  in  your  house  or 
for  your  clothing  or  a  thing  used  upon  your  farm 
which  is  not  made  to-day  with  a  tenth  part  of  the  labor 
cost  of  forty  years  ago,  yet  the  trusts,  with  the  aid  of 
the  tariff,  are  charging  you  at  least  fifty  per  cent,  more 
for  these  articles  than  they  should.  The  theory  of  the 
early  protectionists  in  this  country  was  that  protection 
against  imports,  while  it  might  temporarily  raise  the 
price  of  the  goods  protected,  in  the  long  run,  by  in- 
creasing home  competition,  would  tend  to  lower  prices. 
The  trust,  however,  sprang  up  to  destroy  the  home 
competition,  and  holds  up  the  price  of  the  necessaries 
of  life  to  the  full  extent  that  the  duty  permits.  None 
of  you  farmers  in  this  country  ever  get  a  penny's  value 
out  of  a  protective  tariff,  and  besides  wronging  you  as 
consumers  it  tends  to  destroy  foreign  markets  for  your 
produce. 


A   TALK    WITH    FARMERS  223 

First.  Protective  duties  upon  your  products  are 
imposed  simply  to  deceive  you,  and  cannot  bring  bene- 
fit to  you  because  about  one-third  of  your  product  must 
be  exported. 

Second.  Protective  tariffs  tend  to  lessen  exports 
and  the  tariff  which  is  imposed  for  the  benefit  of  the 
manufacturer  shuts  in  your  grain. 

In  1875  you  farmers  exported  76.95  per  cent,  of  the 
total  exports  of  the  United  States;  in  1885,  72.96  per 
cent.;  in  1895,  69.73  per  cent.;  and  in  1905  about  56 
per  cent.  For  thirty  years  the  amount  of  your  annual 
crops  have  been  the  invariable  test  of  the  prosperity  of 
the  country.  Little  is  said  in  newspapers  about  you  as 
exporters,  while  a  great  deal  of  noise  is  heard  over  the 
export  of  manufactured  products ;  but  if  our  country 
has  been  prosperous,  it  is  due  more  to  the  large  pro- 
ductions of  our  farms  than  to  all  other  sources  com- 
bined. The  important  fact  for  you  to  observe  is  this, 
that  in  the  operation  of  the  general  law  of  trade  the 
part  of  your  product  exported  and  marketed  abroad  at 
the  greatest  cost  and  disadvantage  to  you  fixes  with 
unvarying  certainty  the  price  of  the  remainder  of  the 
product  which  you  sell  in  your  own  country.  This  is 
true  as  a  general  proposition,  and  is  absolutely  true  of 
your  exported  surplus,  but  it  is  not  true  of  the  product 
of  the  manufacturers  because  they  are  sheltered  from 
foreign  competition  by  an  import  duty  and  combine  to 
maintain  the  price  of  their  product  sold  at  home  up  to 


224  THE   TARIFF    AND   THE    TRUSTS 

the  duty  line.  Because  the  number  of  manufacturers 
is  comparatively  small  and  their  interests  are  closely 
allied,  they  can  easily  establish  trusts  and  in  that  way 
control  the  price  of  the  domestic  product,  but  you  are 
so  widely  scattered  that  it  is  not  practicable  for  you. 
The  result  is  that  the  price  of  the  portion  of  your  prod- 
uct sold  to  your  own  countrymen  is  absolutely  fixed  by 
the  price  of  the  surplus  exported  and  sold  in  the  grain 
pits  of  Europe.  A  protective  duty,  as  a  rule,  is  of  no 
value  to  an  exporting  industry;  so,  when  our  manu- 
facturing interests  became  able  to  export,  they  formed 
trusts  and  controlled  the  competition  here  so  as  to  be 
able  to  sell  goods  at  home  at  prices  increased  by  the 
amount  of  the  duty. 

Now,  although  duties  upon  foreign  grain  imported 
into  this  country  can  be  of  no  value  to  you  because  you 
are  exporters,  yet  Congress  has  imposed  heavy  duties 
upon  wheat  and  all  the  other  products  of  agriculture. 
On  September  25  of  1905,  Senator  Foraker,  of  Cincin- 
nati, spoke  at  Bellefontaine  in  the  State  of  Ohio,  and 
in  his  speech  he  said :  "We  have  a  high  duty  on  wheat, 
corn,  rye,  oats,  barley,  potatoes,  butter,  eggs,  milk, 
cattle,  horses,  sheep,  hogs,  wool,  and  everything  else 
the  farmer  produces.  I  have  no  doubt  but,  for  a  sub- 
stantial reduction  of  these  commodities  or  some  of 
them,  a  reciprocity  treaty  could  be  arranged  \vith 
Mexico  and  with  Great  Britain  as  to  Canada  and  with 
still  other  countries;  but  I  do  not  need  to  state,  for 


A   TALK    WITH    FARMERS  225 

everybody  knows  it  without  stating,  that  the  farmers 
of  Ohio  and  the  whole  country  would  be  hostile  to 
such  a  treaty."  Such  talk  as  that  from  public  men  is 
simply  insulting  to  your  intelligence.  Senator 
Foraker,  when  he  uttered  those  words,  knew  that  not 
one  of  the  products  mentioned  except  wool  received 
substantial  protection  from  the  duty  imposed.  These 
words  illustrate  better  than  anything  I  can  say  to  you 
the  deception  which  has  been  practiced  upon  the  farm- 
ers of  this  country  for  forty  years.  Although  you 
produce  the  greatest  amount  of  wheat  of  any  country 
in  the  world,  and  in  1902  exported  $177,000,000  worth 
of  wheat  and  flour,  they  have  given  you  a  duty  upon 
imported  wheat  of  25  cents  per  bushel,  and  the  con- 
gressmen who  imposed  that  duty  knew  that  you  would 
never  realize  a  single  penny  from  it.  It  is  simply  im- 
posed to  allow  campaign  orators  to  declare  before  you 
that  your  products  are  highly  protected.  No  one  im- 
ports or  wants  to  import  wheat  into  our  country  unless 
it  be  the  farmers  of  Manitoba  and  the  western  provinces 
of  the  Dominion  of  Canada,  who  would  like  to  send 
their  wheat  to  the  great  flouring  mills  of  Minneapolis 
to  be  ground.  If  you  will  examine  the  matter,  you 
will  find  that  practically  all  the  wheat  that  comes  into 
the  country  is  from  that  source.  They  give  you  a  duty 
of  15  cents  per  bushel  on  corn,  and  you  raise  more  corn 
than  any  other  two  countries  in  the  world.  You  ex- 
ported in  1900  over  $85,000,000  worth  of  corn,  and 
IS 


226  THE    TARIFF    AND   THE   TRUSTS 

such  a  thing  as  the  importation  of  corn  in  any  quantity 
into  this  country  has  never  been  known.  The  con- 
gressmen knew  it  when  they  imposed  the  duty,  and  it 
was  put  on  simply  as  a  means  of  flattering  and  de- 
ceiving 3'ou.  The  Dingley  Bill  imposed  a  duty  of  $30 
per  head  upon  imported  horses  and  mules  valued  at  $150 
or  less  per  head,  and  if  valued  over  that  amount  25  per 
cent,  ad  valorem  in  addition  thereto.  Now  see  the  un- 
justifiable character  of  this  duty.  In  the  census  of 
1900  it  appears  that  in  the  United  States,  exclusive  of 
horses  used  in  cities  and  towns,  there  are  18,280,000 
horses  and  more  than  3,000,000  mules.  In  all  the 
German  Empire  there  were  in  that  year  only  4,184,000 
horses,  and  in  all  France  only  2,903,000  horses,  and  to 
protect  you,  the  owners  of  about  18,000,000  horses 
and  3,000,000  mules,  against  the  danger  of  importa- 
tion they  impose  this  duty.  Was  ever  such  a  humbug 
perpetrated?  You  know  and  they  knew  that  there 
would  be  no  importations  of  horses  except  possibly  a 
few  blooded  animals  brought  into  the  country  for 
breeding  purposes.  Senator  Foraker  tells  you  that 
you  have  a  protective  duty  against  the  importation  of 
hogs.  Does  the  American  hog  need  protection  from 
the  foreign  hog  when  our  hogs  have  been  rooting  their 
way  all  over  the  earth  for  the  last  twenty  years,  and 
during  the  same  period  at  home  have  been  furnishing 
an  example  to  those  who  seek  tariff  benefits  by  their 
pig-trough  action?     We  are  the  greatest  exporters  of 


A   TALK    WITH    FARMERS  22/ 

pork  in  the  world,  and  the  importation  of  dead  hogs 
into  this  country,  even  if  there  were  no  duty  on  pork, 
would  be  about  as  rare  as  white  blackbirds,  yet  your 
benevolent  congressmen  have  carefully  protected  you 
against  the  importation  of  pork  by  a  duty  of  5  cents  a 
pound  on  bacon  and  hams.  Once  eggs  were  free, 
but  your  thoughtful  congressman,  humiliated  at  his 
oversight,  repaired  the  wrong,  imposing  a  duty  upon 
eggs  of  5  cents  per  dozen,  and  now  the  business  of 
producing  eggs  is  securely  sheltered  from  the  danger 
that  some  Canadian  will  bring  a  basketful  across  the 
border.  Upon  potatoes  they  have  given  you  a  duty 
of  25  cents  per  bushel,  and  upon  hay  $4  per  ton,  yet 
you  produce  more  of  either  one  of  these  products  than 
any  other  country  in  the  world,  and  under  no  circum- 
stances would  they  be  imported  in  any  considerable 
amount.  I  might  continue  and  discuss  each  one  of  the 
farm  products  mentioned  by  Senator  Foraker,  but  v/hy 
should  I  treat  this  matter  seriously?  Is  there  an  in- 
telligent farmer  in  the  United  States  who  does  not 
know  that  such  talk  is  simply  humbug?  Such  state- 
ments of  public  men  are  simply  ridiculous,  and  show 
the  contempt  which  they  have  for  the  intelligence  of 
their  hearers.  The  only  way  in  which  government 
can  protect  you  is  by  giving  you  direct  bounties  upon 
the  amount  of  your  exports  of  agricultural  products 
in  just  the  same  manner  that  the  French,  German, 
Austrian  and  Italian  governments  treated  their  sugar 


228  THE   TARIFF   AND   THE    TRUSTS 

growers  and  exporters  for  about  twenty  years.  For 
many  years  Mr.  David  Lubin,  of  San  Francisco,  trav- 
eled over  the  country  addressing  you  farmers  and 
urging  you  to  seek  such  bounties  upon  your  agricul- 
tural exports.  He  appeared  before  Congressional 
Committees  urging  that  our  protective  tariff  put  many 
burdens  upon  you,  that  you  received  no  benefit  there- 
from, and  that  you  were  entitled  equitably  to  bounties 
upon  your  exports,  but  the  Ways  and  Means  Com- 
mittee, knowing  that  you  would  not  furnish  funds  for 
national  campaigns,  treated  your  representative  with 
scant  courtesy  and  refused  even  to  report  a  bill. 

While  Congress  has  imposed  duties  upon  the  very 
products  which  you  excel  the  world  in  producing  and 
which  they  knew  could  be  of  no  value  to  you,  they  have 
been  very  careful  to  impose  a  duty  of  12  cents  per  one 
hundred  pounds  upon  salt  in  bags,  sacks,  barrels  or 
other  packages.  But  in  order  to  care  for  the  Gloucester 
fishermen,  the  constituents  of  Senator  Lodge,  and  the 
meat  trust,  under  the  guardianship  of  all  the  Con- 
gressmen from  Illinois  and  especially  his  Honor,  the 
Speaker,  they  have  exempted  from  the  eflfect  of  this 
tax  the  salt  imports  in  bond  to  be  used  in  curing  fish 
and  curing  meats  for  exportation.  It  would  be  of 
great  value  to  you  who  are  fruit  and  vegetable  grow- 
ers if  your  surplus  could  be  canned  cheaply.  With 
cheap  sugar  these  would  be  a  source  of  profit.  Cheap 
tin  and  cheap  glass  are  also  essential  to  profitable  can- 


A   TALK    WITH    FARMERS  229 

ning.  But  Congress  has  imposed  duties  on  sugar  of 
75  to  loo  per  cent.,  on  tin  plate,  80  per  cent.,  and  on 
glass  60  per  cent. 

Now,  it  will  aid  you  in  determining  why  high  tariff 
duties  are  unnecessary  in  this  country  and  surely  un- 
necessary to  you  to  see  the  reason  why  you  lead  the 
world  at  present  in  the  production  of  grain  and  other 
agricultural  products.  You  farmers,  according  to  the 
census  of  1900,  have  841,201,546  acres  of  land  in  your 
farms.  It  is  divided  into  5,739,657  separate  farms, 
averaging  a  little  more  than  145  acres  each.  Your 
farms  alone  cover  an  expanse  six  times  larger  than  the 
whole  area  of  France.  In  France,  according  to  the 
agricultural  statistics  of  1892,  there  were  5,702,000 
farms,  almost  exactly  the  same  number  as  you  possess 
in  the  United  States,  but  their  average  size  was  less 
than  twenty  acres,  instead  of  145  acres.  The  average 
size  of  the  Western  farm  is  a  little  over  386  acres,  and 
the  average  value  of  the  farm  lands  in  the  United 
States,  according  to  the  census  of  1900,  is  a  little  less 
than  $25  per  acre,  while  the  average  value  of  farm 
lands  in  Europe  is  probably  three  times  that  amount. 
Now,  you  lead  in  agriculture  for  several  reasons.  Your 
farms  are  extensive  compared  with  those  of  European 
countries  and  therefore  each  of  you  can  afford  to  use 
mowing-machines,  reapers,  and  other  labor-saving 
machinery  to  a  much  greater  extent  than  they  can  in 
Europe.     Again,  for  fifty  years  you   have  been  ex- 


230  THE    TARIFF    AND   THE    TRUSTS 

tending  your  wheat  farming  in  the  Western  states  to 
new  lands.  This  virgin  soil  continues  to  produce  for 
several  years  in  succession  good  crops  of  the  same 
kind  without  demanding  manures  like  older  land. 
Your  competitors  in  Europe,  however,  are  obliged  to 
use  fertilizers  every  year  at  considerable  expense. 
Again,  they  are  farming  lands  worth  from  $75  to  $100 
an  acre,  while  the  average  value  of  your  farms  is  only 
$25  an  acre.  You  make  extensive  use  of  horses  and 
mules,  but  a  horse  is  a  rare  sight  in  many  parts  of 
Europe.  The  traveler  in  the  Tyrol  is  frequently  obliged 
to  send  four  or  five  miles  to  procure  a  horse  for  a  day's 
travel  over  the  mountains.  The  number  of  your  horses 
and  mules  is  about  equal  to  those  of  all  Europe  outside 
of  Russia.  The  greater  part  of  the  farming  of  Europe 
is  carried  on  by  hand  labor.  Everywhere  you  see  men 
and  women  mowing  the  grass  with  scythes  and  cutting 
the  grain  with  sickles.  Although  you  pay  much  high- 
.er  wages  for  your  help,  still,  to  a  great  extent,  the  day's 
wage  you  pay,  measured  by  the  amount  of  production, 
is  cheap  compared  with  that  of  European  laborers. 
On  June  25,  1902,  the  Hon.  Jacob  H.  Gallinger, 
United  States  Senator  for  New  Hampshire,  said  in 
the  Senate :  "As  regards  power  of  production,  Mulhall 
has  shown  that  a  farm  hand  in  the  United  States  does 
as  much  as  two  in  the  United  Kingdom,  three  in  Ger- 
many, five  in  Austria,  and  seven  in  Russia.  The  farm 
laborers  of  Europe  do   nine  times  the  work  to   get 


A   TALK    WITH    FARMERS  23I 

double  the  result  of  the  farm  laborers  in  the  United 
States.  That  is,  it  takes  four  and  a  half  Europeans 
to  equal  one  American.  Extend  the  comparison  to 
Asia  and  Africa  and  we  find  that  the  average  United 
States  producer  is  equal  to  ten  the  world  over,  outside 
of  our  own  country.  This  comparison  is  emphasized 
by  our  coal  consumption  and  steam  power,  and  finally 
by  our  products  of  manufacture."  You  pay  your  farm 
laborers  higher  wages  than  are  paid  in  Europe  simply 
because  they  earn  more  than  is  earned  by  similar  labor 
in  Europe.  This  element,  together  with  the  demand 
and  supply  of  labor,  absolutely  fixes  the  prices.  The 
tariff  has  nothing  to  do  with  the  matter,  and  the  tariff 
at  every  point  operates  against  you. 

Let  us  examine  another  feature  of  the  injury  of  the 
tariff  to  you.  The  protective  tariff  on  imports  tends 
to  destroy  foreign  markets  for  your  surplus,  and  thus 
to  reduce  the  price  at  home.  A  sale  by  you  of  your 
surplus  produce  to  people  in  any  other  country,  when 
reduced  to  the  last  analysis,  is  but  an  exchange  of 
products  between  you  and  the  foreign  exporter.  This 
is  not  so  apparent,  because  you  sell  your  grain  directly 
to  the  exporter.  Money  is  but  the  medium  of  bringing 
about  an  exchange  between  your  wheat  and  the  manu- 
factured goods  of  the  foreigner.  If  the  goods  for 
which  you  have  exchanged  yours  can  enter  our  coun- 
try only  by  payment  of  high  duties,  we  have  an  ob- 
struction to  trade  which  will  reduce  the  foreign  de- 


232  THE   TARIFF    AND   THE    TRUSTS 

mand  for  your  product  and  so  lower  its  market  value 
here.  President  McKinley's  last  words  at  Buffalo  con- 
firm this  contention.  You  will  remember  he  said :  "A 
system  which  provides  a  mutual  exchange  of  com- 
modities is  manifestly  essential  to  the  continued  and 
healthful  growth  of  our  export  trade.  We  must  not 
repose  in  fancied  security  that  we  can  forever  sell 
everything  and  buy  little  or  nothing.  If  such  a  thing 
were  possible  it  would  not  be  best  for  us  or  for  those 
with  whom  we  deal."  Shut  out  a  foreign  staple  prod- 
uct by  prohibitive  duties  and  you  shut  in  a  staple 
product  of  the  farms.  There  is  abundant  evidence  in 
our  history  to  show  this.  The  period  between  1846 
and  i860  in  this  country  was  one  of  comparatively  low 
duties.  An  average  tariff  duty  on  all  dutiable  imports 
of  24  per  cent,  prevailed  from  1846  to  1857,  and  of 
about  19  per  cent,  from  1857  to  1861.  Under  these 
fourteen  years  of  low  tariffs  our  imports  of  merchan- 
dise increased  from  about  $117,914,400  in  1846  to 
$353,616,000  in  i860,  most  of  the  increase  being  in 
European  products.  This  was  an  increase  at  the  rate 
of  200  per  cent,  in  fourteen  years.  Now  notice  that 
during  the  same  period  our  exports  increased  from 
$109,583,000  in  1846  to  $333,576,000  in  i860,  an  in- 
crease of  204  per  cent.,  the  increase  of  exports  keeping 
a  little  more  than  even  pace  with  the  increase  of  im- 
ports. Twenty-eight  years  after,  at  the  same  ratio  of 
increase  as  between  1846  and  i860,  our  exports  ought 


A   TALK    WITH    FARMERS  233 

to  have  been  about  a  billion  and  a  half  or  two  billion 
dollars,  but  in  1888  they  were  only  $695,954,000.  This 
was  due  to  the  increased  duties.  As  foreigners  will 
not  and  cannot  send  us  anything  unless  we  sell  to  them 
an  equal  value  in  American  products,  it  is  easy  to  see 
why  our  exports  have  been  so  greatly  reduced.  Our 
experience  from  1846  to  i860  showed  that  exports 
kept  pace  with  imports,  and  that  the  one  increased  as 
fast  as  the  other.  Under  the  high  protective  tariffs 
that  commenced  in  1864  our  exports  shrunk  about  as 
much  as  our  imports.  The  present  annual  loss  to 
American  exporters,  brought  about  by  the  protective 
tariff,  is  a  diminished  sale  of  at  least  a  billion  dollars  a 
year.  More  than  half  this  loss  falls  upon  you  farmers 
and  planters,  since  considerably  more  than  half  of  our 
exports  consist  of  your  products.  Here  is  a  terrible 
burden  placed  upon  you.  You  are  losing  this  year  and 
every  year  regularly  by  reason  of  the  tariff  customers 
to  the  value  of  at  least  $400,000,000,  of  which  sum  a 
considerable  per  cent,  would  be  profit.  You  are  cut 
off  from  this  profit  simply  because  the  great  trusts 
have  imposed,  through  Congress,  duties  running  from 
30  to  250  per  cent,  on  foreign  articles  competing  with 
their  products.  They  simply  shut  out  their  competing 
products  and  shut  in  your  products.  Am  I  not  right 
in  saying  that  everyone  plucks  some  of  your  wool? 

Six  years  ago  the  late  John  Hay,  Secretary  of  State, 
speaking   upon   political    issues    said :    "We    pay   the 


234  THE    TARIFF    AND   THE    TRUSTS 

highest  wages  which  are  paid  in  the  world ;  we  sell 
our  goods  to  such  advantage  that  we  are  beginning  to 
furnish  them  to  every  quarter  of  the  globe.  We  are 
building  locomotives  for  railways  in  Europe,  Asia,  and 
Africa ;  our  bridges  can  be  built  in  America,  ferried 
across  the  Atlantic,  transported  up  the  Nile,  and  flung 
across  a  river  in  the  Soudan  in  less  time  than  any 
European  nation,  wuth  a  start  of  4,000  miles,  can  do 
the  work.  We  sell  ironware  in  Birmingham,  carpets 
in  Kidderminster ;  we  pipe  sewers  of  Scotch  cities ; 
our  bicycles  distance  all  competitors  on  the  Continent ; 
Ohio  sends  watch  cases  to  Geneva.  All  this  is  to  the 
advantage  of  all  parties ;  there  is  no  sentiment  in  it ; 
they  buy  our  wares  because  we  make  them  better  and 
at  lower  cost  than  other  people."  Now,  if  we  make 
all  of  these  articles  at  so  much  lower  cost  than  the 
foreigner  that  we  can  afford  to  export  them  to  him 
in  all  parts  of  the  world,  is  there  any  doubt  about  the 
fact  that  we  do  not  need  a  tariff  to  protect  our  manu- 
facturers against  the  same  articles  imported  from 
foreign  countries?  You  have  been  feeding  the  world 
for  the  last  thirty  years  by  the  irreparable  loss  of  the 
virgin  fertility  of  your  soil,  while  the  manufacturers 
have  been  denying  you  the  right  to  obtain  the  best 
value  the  world  has  to  offer  in  exchange  for  your  food 
supplies.  Not  only  this,  but  when  you  go  to  market 
you  have  the  privilege  of  paying  the  United  States 
Steel  Corporation  about  one-quarter  more   for  a  keg 


A   TALK    WITH    FARMERS  235 

of  wire  nails  than  the  same  nails  are  sold  abroad.  You 
pay  at  the  hardware  store  at  least  a  quarter  more  for 
a  coil  of  barb  wire  than  the  foreigner  does  for  the 
same  wire.  You  not  only  pay  a  heavy  duty  on  raw 
sugar,  but  on  every  hundred  pounds  of  sugar  you  buy 
you  pay  125^  cents  additional  price  for  refining  the 
sugar,  this  last  exaction  going  to  the  trust  alone  and 
being  more  than  the  entire  cost  of  refining.  You  pay 
to  the  glass  trust  and  the  pottery  trust  for  every  piece 
of  glass  and  pottery  you  buy  all  the  way  from  50  to  loo 
per  cent,  more  than  you  would  pay  but  for  the  tariff. 
In  short,  you  have  to  hoe  your  row  alone  without  pro- 
tection or  privilege  from  government  but  you  pay 
dear  for  the  hoe,  you  pay  dear  for  the  plow,  you  pay 
dear  for  the  Paris  green  and  for  every  chemical  you 
need.  The  United  States  Steel  Corporation,  the 
borax  trust,  the  white  lead  trust,  the  lumber  trust,  all 
these  trusts,  protected  by  high  tariffs,  combine  to  filch 
your  hard-earned  money  in  ways  so  hidden  and  de- 
ceptive that  it  is  hard  for  you  to  follow  them.  There 
is  not  an  article  of  the  clothing  of  your  family  which 
does  not  pay  tribute  to  the  trust.  There  is  scarcely 
an  item  in  your  grocery  bill  that  does  not  include  a  tax. 
The  furnishings  which  make  your  house  a  home,  the 
windows  that  give  you  air  and  light,  the  books  and 
papers  that  you  read,  every  piece  of  wire  and  steel  and 
every  nail  you  buy  are  instruments  of  their  extortion. 
Death  itself  inspires  no  sanctity  on  the  part  of  these 


236  THE   TARIFF   AND   THE    TRUSTS 

trusts.  They  take  toll  from  your  coffin,  tax  the  plumes 
and  the  varnish  on  the  hearse  that  bears  you  to  your 
grave,  levy  tribute  on  the  spade  that  digs  your  grave, 
and  then  stretch  forth  a  greedy  hand  beside  your  tomb- 
stone and  gather  from  your  estate  an  increased  price 
for  it  of  fifty  or  sixty  per  cent.  Moloch  himself  would 
be  more  merciful  to  you  than  Mamm.on.  You  pay 
taxes  for  an  army  or  navy  sent  to  China  or  the  Philip- 
pines to  secure  an  open  door  abroad,  and  then  your 
representative  in  Congress  closes  your  own  door  to 
cheap  necessaries  of  life  at  home.  While  you  are 
paying  the  increased  price  which  makes  the  tariff  of 
great  profit  to  the  manufacturer  at  home,  he  is  selling 
the  same  goods  in  European  countries  for  twenty  to 
fifty  per  cent,  less  than  he  is  selling  them  to  you.  In 
short,  each  and  every  one  of  you  furnish  the  money 
for  a  bounty  to  the  manufacturer  that  enables  him  to 
be  generous  to  foreigners.  The  manufacturer  will 
tell  you,  through  his  paid  agent,  that  thus  he  is  able 
to  run  his  factory  the  whole  year,  and  if  he  could  not 
tax  you  at  home  he  would  have  to  shut  up  his  factory 
at  the  end  of  eight  months,  and  that  he  has  to  sell  his 
product  abroad  for  less  than  the  cost  price  of  manu- 
facture. But  how  can  you  possibly  be  sure  that  he 
does  sell  it  abroad  for  less  than  it  costs  him  to  manu- 
facture it?  And  if  it  is  true,  ought  the  trust  to  be 
allowed  to  impose  a  private  tax  on  home  consumers  to 
recoup    such  a  loss?    Trusts   are  in  control   of  the 


A   TALK    WITH    FARMERS  237 

whole  production  of  the  country,  and  }^ou  must  pay 
their  prices  or  starve.  You  Hve  in  a  democratic  form 
of  government,  and  are  supposed  to  be  our  rulers,  but 
I  can  name  five  trust  magnates,  with  abundance  of 
money  and  little  scruple,  who  actually  wield  more 
power  over  the  action  of  government  through  the 
bosses  of  political  machines  than  any  five  millions  of 
you  good-natured  farmers  are  able  to  exercise.  Has 
not  the  time  come  for  somebody  to  get  mad?  When 
you  are  no  longer  indignant  at  such  injustice  and 
wrong,  when  you  placidly  submit  to  extortions  on  the 
part  of  great  combinations  controlling  the  industries 
of  life,  when  you  show  a  kind  of  an  admiration  for 
great  wealth  obtained  through  injustice  and  corruption, 
and  forgive  the  men  who  get  it  because  they  give  a 
small  portion  of  it  to  charity,  when  you  vote  the 
straight  Republican  or  the  straight  Democratic  ticket 
blindly,  notwithstanding  that  the  one  party  openly  and 
the  other  secretly  connive  with  the  owners  of  the  trusts 
to  aid  them  in  robbing  you,  when  all  these  things  go 
on  for  forty  years  and  men  do  not  get  mad,  then  free 
government  is  indeed  endangered.  The  politicians 
simply  cheat  you  with  the  empty  appearance  of  political 
power  when  the  substantial  blessings  of  life  are  taken 
from  you  by  the  laws  they  make.  How  much  longer 
will  you  continue  to  approve  this  oppressive  law  which 
bestows  your  property  upon  favorite  trusts?  You 
simply  pay  the  money  which  you  need  to  people  who 


238  THE    TARIFF    AND   THE    TRUSTS 

do  not  need  it,  and  you  have  been  doing  it  so  long,  and 
it  has  become  so  much  a  matter  of  second  nature  with 
you,  that  you  really  seem  to  enjoy  being  fleeced.  You 
may  boast  of  your  political  rights,  but  I  tell  you  frank- 
ly that  no  body  of  men  was  ever  put  into  bondage  by 
tyrants  so  petty,  so  cheap,  and  so  pitiless.  The  in- 
herited predatory  tendency  of  strong  and  unscrupulous 
men  to  seize  upon  the  fruits  of  other  people's  labor  can 
only  be  checked  when  the  victims  of  the  robbery  are 
sufficiently  indignant  at  the  injustice  to  exert  all  their 
power  to  vindicate  their  rights. 

In  each  campaign  the  political  speakers  tell  you  that 
the  Englishman  and  the  German  object  to  our  protect- 
ive tarifif,  and  that  it  follows  conclusively  that  they 
lose  by  it  and  that  you  are  helped  by  it.  Fine  logic 
this,  that  because  the  people  of  a  foreign  country  ob- 
ject to  the  injustice  of  our  laws  therefore  they  must 
benefit  you.  They  tell  you  that  you  have  to  compete 
with  the  cheap  pauper  labor  of  Europe  and  that  you 
need  protective  duties  upon  your  products  to  repay 
you  for  the  difference  between  the  price  of  labor  in 
this  and  in  European  countries.  I  have  called  your 
attention  above  to  the  words  of  Senator  Gallinger 
which,  if  true,  show  that  you  do  not  overpay  your 
laborers.  Between  1870  and  1880  the  self-binding 
harvester  came  into  use.  Before  that  invention  you 
employed  six  or  seven  men  to  each  harvester  to  tie  the 
sheaves  of  wheat.     After  its  completion  you  were  able 


A   TALK    WITH    FARMERS  239 

to  discharge  at  least  five  of  the  number.     You  attach 
ten  or  twelve  plows  to  a  steam  traction  engine  and 
plow  up  the  prairie  while  your  competitor  in  Egypt 
or  India  is  scratching  the  ground  with  a  mere  stick. 
You  thrash  your  grain  with  steam  thrashers  as  fast 
as  you  gather  it,  while  your  competitor  abroad  is  driv- 
ing horses  over  the  thrashing  floor  to  shell  out  the 
grain.     With  all  the  marvelous  inventions  in  agricul- 
tural machinery   which  enable  you  to  undersell  your 
competitors  in  every  market  of  the  world,  your  ma- 
chines still  do  not  attain  the  efficiency  of  those  em- 
ployed  by  the  manufacturer.     If   you    can   undersell 
your  competitors,  he  certainly  can  undersell  his  in  the 
foreign  markets.     There  never  was  so  foolish  a  cry 
as  that  against  competition  with  pauper  labor.     The 
Frenchman  cries  out,  "Protect  us  from  the  imports  o£ 
German  woolen  goods  and  iron ;"  and  the  German  cries 
out,  "Protect  us  from  the  imports  of  French  woolen 
goods  and  iron ;"  and  the  American,  with  better  oppor- 
tunities for  cheap  manufacture  than  either,  cries  out, 
"Protect  us  against  French  and  German  woolen,  iron 
and  steel ;"  and  the  German,  Frenchman,  Japanese  and 
Chinaman  all  cry  out  together,  "Protect  us  from  the 
high-priced  labor  of  the  United  States."     Do  you  not 
see  at  a  glance  that  some  of  them  must  be  mistaken? 
Do  you  not  appreciate,   in  view  of  these  facts,  that 
such  arguments  for  protection  are  simply  an  aggrega- 
tion of  contradictions,  a  bundle  of  sticks — inconsisten- 


240  THE   TARIFF   AND   THE   TRUSTS 

cies — which  taken  one  by  one  are  easily  broken?  Our 
home  producers  who  are  able  to  meet  competition  on 
equal  terms  abroad  must  necessarily  have  already  be- 
come assured  at  home  without  the  artificial  aid  of  a 
tariff. 

"But,"  say  the  protectionist  orators,  "has  the  world 
ever  seen  such  marvelous  prosperity  as  we  enjoy  in 
the  United  States?"  Surely  we  ought  to  enjoy  marvel- 
ous prosperity.     What    country  ever  had  such  natural 
resources?  Where  else  in  the  world  can  you  find  over 
fifty  states  with  a  territory  of  more  than  three  million 
and  a  half  square  miles  in  area  enjoying  absolute  free- 
dom of  commerce  with  each  other?     The  Continent 
of  Europe  is  divided  into  more  than  twenty  separate 
states  with  customs   lines  obstructing  trade  running 
between  each  and  every  one  of  them.     The  prosperity, 
however,  which  this  country  enjoys  is  the  prosperity  of 
a  few  who  are  the  beneficiaries  of  the  tariff.     A  pros- 
perity where  the  whole  profits  are  held  in  a  few  hands 
has  a  kind  of  a  tired  look.     The  question  for  you  farm- 
ers to  ask  yourselves  is,  "Who  makes  the  tariff  and 
who  pays  for  the  tariff;"  and  if  you  will  ask  your- 
selves that  question  and  reflect  upon  it  a  little  while, 
you  will  come  to  but  one  conclusion,  and  that  is  that 
the  tariff  is  made  by  a  few  men  who  have  seized  con- 
trol of  the  manufactures  of  the  country  and  that  you 
pay  the  bills.     Are  any  of  you  farmers  becoming  mil- 
lionaires?    Do  you  know  of  any  farmer  in  the  United 


A   TALK    WITH    FARMERS  24I 

States  who  is  worth  a  milHon  and  who  made  it  in 
farming?  If  government  keeps  on  protecting  you  as 
it  has  for  the  last  forty  years,  it  will  protect  you  off 
from  the  face  of  the  earth.  If,  as  the  protectionists 
teach,  the  ships  of  commerce  bring  to  our  shores  com- 
mercial destruction,  why  not  have  Congress  pass  laws 
to  close  our  ports  or  burn  our  ships,  which  would  prove 
more  effective  in  destroying  commerce  than  a  portect- 
ive  tariff?  Do  not  think  I  am  exaggerating  in  point- 
ing out  such  a  remedy.  The  German  farmers  recently 
have  carried  the  protective  craze  just  as  far  as  I  sug- 
gest. The  German  Emperor  was  anxious  to  connect 
the  Rhine  and  the  Elbe  rivers  by  a  canal.  The  canal 
would  pass  through  the  State  of  Prussia,  and  the  act 
providing  for  its  construction  came  up  before  the 
Prussian  Landtag.  The  agricultural  party  known  as 
the  Agrarians  defeated  the  bill  providing  for  the  build- 
ing of  this  canal  because  it  would  bring  your  grain  to 
Berlin  and  the  western  part  of  the  German  Empire 
and  make  your  competition  the  more  effective  against 
the  sale  of  German  grain.  If  the  exchange  of  products 
between  the  United  States  and  Canada  brings  evil  to 
both  parties,  then  the  exchange  of  products  between 
the  fruit-grower  in  California  and  the  ironmaster  of 
Pittsburg  is  all  wrong.  Commerce  between  adjoin- 
ing people  is  everlastingly  right,  and  the  world  has 
never  produced  an  example  of  its  signal  benefits  so 
striking  as  our  fifty  states  and  territories  with  abso- 
16 


242  THE   TARIFF    AND   THE    TRUSTS 

lute  free  trade  between  them.  In  1846  Congress  passed 
what  is  known  as  the  Walker  Tariff.  You  will  find  a 
full  description  of  it  in  a  subsequent  chapter  on  the 
history  of  our  tariffs.  The  duty  from  1846  to  1857, 
as  stated  above,  did  not  exceed  25  per  cent.  In  1857 
the  average  ad  valorem  duties  were  reduced  to  about 
19  per  cent.,  and  continued  thus  till  1861.  The  fol- 
lowing tables  will  show  you  the  results  of  that  tariff  as 
it  affected  farming,  and  also  the  effect  of  the  subse- 
quent protective  tariff'  of  about  50  per  cent. 

Value  of  Farm  Lands 

1850  i860  1880 

$3,271,575,421  $6,645,045,007  $10,197,096,776 

Increase  for  ten  years  (1850  to  1S60) 3.373,469,586 

Increase  for  twenty  years  (i860  to   1880) 3.553.051,769 

Yearly   rate  of  increase    (1850   to    i860) 337.346,958 

Yearly  rate  of  increase   (i860  to  1880) 177,602,588 

Per  cent,  of  yearly  increase   (1850  to  i860) loj/i 

Per  cent,  of  yearly  increase   (i860  to  1880) 2j/$ 

The  average  value  of  our  improved  land  was  $11  per 

acre  in  1850  and  $16  in  i860,  an  increase  in  the  ten 

years  of  $5  or  45  per  cent,  in  the  decade.     Its  value 

was  $19  per  acre  in  1880,  an  increase  of  $3  in  twenty 

high  tariff  years  or  9  per  cent,  each  decade.     Before 

i860  the  annual  increase  in  value  per  acre  was  fifty 

cents,  between  i860  and  1880  it  was  only  fifteen  cents. 

The  total  acreage  in  farms  at  the  three  different  periods 

was  as  follows : 

1850  i860  1880 

293,560,614  407,212,538  536,081,83s 

Increase     ....! 113,651,924  128, 869,. ?9- 

Yearly    increase 11,365,192  6,443,468 


A   TALK    WITH    FARMERS  243 

Now  remember  that  between  1850  and  i860  the  country 
had  not  yet  been  opened  up  by  railways  to  any  such  ex- 
tent as  between  i860  and  1880,  and  yet  the  growth  in 
the  wealth  of  the  farmer  was  more  rapid  between  1846 
and  i860  than  during  any  other  part  of  our  history. 
The  price  of  wheat  rose  from  an  average  of  $1.02  in 
1845-1847  to  $i.5i>4  from  1848-1856,  a  price  never 
equaled  before  or  since.  Corn,  cotton,  butter  and  , 
wool  increased  about  ;^t,  1-3  per  cent,  in  price  during 
the  existence  of  the  Walker  Tariff.  The  year  i860 
was  the  most  prosperous  year  in  the  history  of  the 
country  up  till  that  date  and  the  prices  of  the  necessa- 
ries of  life  were  lower  during  that  period  than  they  are 
to-day.  No  better  illustration  of  the  benefits  of  free 
trade  for  an  exporting  farming  people  can  be  found  in 
the  world  than  the  tiny  Kingdom  of  Denmark.  The 
Danes  impose  no  duties  upon  agricultural  products, 
meats,  or  dairy  products.  In  the  year  1902  the  people 
of  Denmark  exported  $80,500,000  worth  of  dairy  prod- 
ucts, meat,  and  other  agricultural  products,  and  this 
$80,500,000  was  $35  per  head  for  each  of  its  population. 
A  Danish  writer,  Mr.  R.  A.  Westenholz,  in  an  article 
in  1903  in  the  Monthly  Reviezv  points  with  justifiable 
pride  to  the  fact  that  even  the  farmers  of  the  United 
States  export  only  half  that  sum. 

The  protectionist  orator,  however,  will  say  to  you, 
"Look  at  the  condition  of  this  country  during  the 
period  of  the  Wilson  Tariff."     Look  at  it,  and  be  sure 


244  THE    TARIFF    AND   THE   TRUSTS 

you  look  at  it,  for  that  tariff  is  an  example  of  the  power 
of  great  monopolies  to  corrupt  Senators  whose  party 
had  pledged  itself  to  care  for  the  people's  inter- 
ests and  to  relieve  them  from  the  burdens  of  a  high 
protective  tariff.  I  shall  discuss  that  tariff  in  the 
chapter  on  Our  Tariff  History  and  show  that  the 
condition  of  depression  at  that  time  was  the  result  of  a 
combination  of  causes  other  than  the  tariff.  The  ex- 
tremely low  price  of  wheat  before  the  passage  of  that 
tariff  and  after  its  passage  had  a  hundred  times  more 
to  do  with  the  stoppage  by  financial  depression  of  the 
sale  of  manufactured  goods  than  the  slight  change  in 
the  schedules.  You  represent  nearly  one-half  of  the 
people  in  this  country,  and  when  the  returns  from  your 
business  are  small  the  amounts  which  you  purchase 
are  also  small.  Every  sagacious  financier  knows  full 
well  that  business  depends  very  largely  upon  your  suc- 
cess, and  for  this  reason  the  cotton  and  produce  brok- 
ers bribe  the  men  who  are  making  the  reports  upon 
cotton  and  wheat  to  procure  the  estimates  in  advance 
for  the  purposes  of  speculation.  The  protective  super- 
stition ascribes  all  prosperity  to  governmental  action, 
and  misleads  the  people  into  believing  that  the  in- 
creased prosperity  of  the  favored  few  is  the  prosperity 
of  all.  Protective  tariffs,  according  to  these  gentlemen, 
stimulate  into  activity  the  inventive  genius  of  the  peo- 
ple, lengthen  the  wool  upon  the  sheep's  backs,  people 
our  great  Republic  with  millions,  send  the  great  rivers 


A   TALK    WITH    FARMERS  245 

coursing  through  fruitful  valleys,  and  bring  blessings 
to  everybody.  How  much  longer  are  you  going  to 
believe  these  ridiculous  tales? 

Nature  provided  in  this  United  States  the  noblest 
heritage  ever  given  to  men.  Originally  we  had  about 
1,880,000.000  acres  of  farm  land.  The  original  idea 
of  the  fathers  of  the  country  was  that  this  land  should 
be  held  for  all  the  citizens  who  were  willing  to  make  it 
their  home  and  to  till  it;  1,226,000,000  acres  of  this 
land  was  west  of  the  Mississippi  River.  One-third  to 
two-fifths  of  it  is  barren  land  or  deserts,  and  of  the 
800,000,000  of  acres  remaining  more  than  a  ninth  part 
has  been  given  away  by  government  to  great  railroad 
corporations  as  a  bounty  for  constructing  railroads 
through  the  country.  The  process  of  the  selection  of 
this  land  by  the  railroads  has  been  going  on  from  year 
to  year,  and  they  have  taken  in  the  neighborhood  of 
150,000  square  miles  of  the  agricultural,  mining  and 
timber  lands  west  of  the  Mississippi,  a  territory  larger 
than  the  whole  of  Great  Britain.  These  railroads  own 
some  of  the  best  lands  through  which  they  run,  hold 
mortgages  upon  many  of  your  farms,  and  control  mat- 
ters generally  in  your  part  of  the  country.  Have  you 
had  enough  of  this?  Are  not  your  sons  and  daughters, 
discouraged  with  the  results  of  the  farm,  leaving  their 
homes  by  the  hundreds  for  the  city?  The  history  of 
mankind  shows  no  single  instance  of  a  people  that 
deserted  the  lands  and  flocked  to  the  cities  long  con- 


246  THE    TARIFF    AND   THE    TRUSTS 

tinning  free.  The  railroad  corporations  that  own  these 
vast  tracts  of  land  absolutely  control  your  means  of 
sending  your  products  to  market,  and,  as  you  well 
know,  they  charge  you  prices  for  the  shorter  hauls 
which,  when  compared  with  the  charges  to  your  more 
powerful  competitors,  are  in  violation  of  the  statute. 
Are  you  so  well  satisfied  with  this  railway  monopoly 
as  to  wish  to  continue  the  monopoly  of  protective 
tariffs  and  trusts? 

England  a  hundred  and  fifty  years  or  more  ago 
granted  a  charter  to  the  old  East  India  Company  giv- 
ing it  the  right  of  exclusive  trade  with  the  people  of 
India,  which  meant  that  this  company  had  a  legal  right 
to  fix  the  prices  of  the  necessaries  of  life  sold  to  those 
people.  England  was  not  under  the  same  obligation 
which  our  government  owes  you  to  protect  you  from 
the  predatory  raid  of  a  monopoly,  but  England  made 
that  East  India  Company  pay  her  $2,000,000  annually 
for  that  exclusive  right,  and  limited  that  right  to  grants 
of  fifteen  years.  The  beneficiaries  of  our  protective 
tariff  have  enjoyed  the  advantage  of  exacting  an  in- 
creased price  for  the  necessaries  of  life  from  the  whole 
American  people  for  upwards  of  forty  years,  and  now 
they  claim  a  vested  right  to  continue  it.  It  is  not  a 
vested  right ;  it  is  a  vested  wrong.  When  we  ask  Con- 
gressmen to  do  us  justice  and  reduce  these  outrageous 
tarififs,  they  go  around  saying  to  each  other,  "Keep 
quiet,   don't   discuss    the   question,   stand   pat."     "No 


A   TALK    WITH    FARMERS  247 

party,"  says  Secretary  Shaw,  "can  ever  revise  the  tariff 
in  safety,  and  the  only  time  to  risk  the  experiment  is 
at  an  extraordinary  session  immediately  following  the 
inauguration  of  a  new  administration."  This  answer 
shuts  out  hope  and  shuts  in  despair  unless  you  and  I 
and  our  fellow-countrymen  demonstrate  that  we  have 
a  little  something  to  say  about  the  laws  of  this  country. 
Such  an  injustice  as  our  tariff  has  the  moral  law  of  the 
universe  against  it.  If  we  continue  to  submit  to  this 
injustice,  we  are  unworthy  of  free  government.  The 
monopolistic  giants  which  thrive  on  protection  will 
never  remove  the  burdens  from  the  people  until  a  pop- 
ular movement  arises  among  the  people  entirely  out- 
side of  both  political  parties  which  will  drive  the 
emissaries  of  the  trust  from  public  office.  Men  do  not 
relinquish  special  privileges  which  yield  them  millions 
without  a  terrific  battle.  But  if  our  institutions  are 
to  be  preserved,  if  our  flag  is  to  be  kept  flying  over  free 
men,  if  justice,  the  abiding  source  of  good  government, 
is  to  exist,  this  tariff,  with  bag  and  baggage,  must  go. 


CHAPTER  VIII 


OUR   TARIFF    HISTORY 


During  the  period  of  our  colonial  life  colonies  in 
general  were  considered  as  the  exclusive  property  of 
their  sovereign  state  and  they  were  allowed  no  com- 
mercial intercourse  with  other  nations.  This  policy 
was  adopted  by  Great  Britain  in  her  relations  to  her 
American  colonies.  In  1701  the  charter  colonies  were 
reproached  by  the  lords  of  trade  "with  promoting  and 
propagating  woolen  and  other  manufactures  proper  to 
England."  From  the  furs  of  the  country  hats  were 
made  and  the  London  hatters  procured  an  act  forbid- 
ding hats  to  be  transported  even  from  one  plantation 
to  another.  The  manufacture  of  charcoal  iron  was 
our  leading  industry.  So  plentiful  was  the  ore  and 
so  cheap  was  wood  that  the  industry  was  thus  early 
established  notwithstanding  England's  attempts  to  limit 
it.  The  iron  masters  of  England  clamored  for  Parlia- 
ment to  check  our  manufacture  of  leather  and  iron. 
The  House  of  Commons  passed  a  bill  providing  that 
"none  in  the  plantations  shall  manufacture  iron  wares 
of  any  kind  out  of  any  sows,  pigs  or  bars  whatever." 
England  not  only  attempted  to  control  the  trade  of 

248 


OUR   TARIFF    HISTORY  249 

the  American  colonies,  but  through  her  tariffs  crushed 
out  the  flourishing  linen  and  woolen  industries  of 
Ulster  in  Ireland,  and  as  a  result  thousands  of  Scotch- 
Irishmen  emigrated  from  that  province  to  America. 
Between  1730  and  1770  more  than  half  of  the  Pres- 
byterian population  of  Ulster  came  to  xA.merica,  where 
it  formed  more  than  one-sixth  part  of  our  entire  popu- 
lation at  the  time  of  the  Declaration  of  Independence. 
The  descendants  of  these  men  to-day  control  the  great 
iron  and  coal  industries  of  Pennsylvania,  and  Penn- 
sylvania in  1785  was  the  first  one  of  the  states  of  the 
Federation  to  impose  protective  duties  against  sister 
states.  The  ancestors  of  the  present  millionaires  of 
Pittsburg  however  were  modest.  They  imposed  duties 
of  only  2^/2  per  cent. ;  a  hundred  and  twelve  years  later 
their  descendants  induced  Congress  to  pass  the  Dingley 
Bill  imposing  duties  all  the  way  from  50  to  150  per 
cent,  to  protect  their  infant  industries  from  foreign 
competition. 

The  great  work  of  Adam  Smith  on  the  "Wealth  of 
Nations"  was  published  in  1776,  yet  in  1756,  twenty 
years  before  it  appeared,  the  iron  manufacturers  of 
Great  Britain,  in  a  petition  to  Parliament,  asked  that 
the  colonies  be  allowed  to  export  iron  products  to 
England,  and  the  reasons  which  they  set  forth  in  their 
long  petition  embodied  the  theory  of  commerce  which 
Adam  Smith  thereafter  set  forth  in  his  great  work. 
The  manufacturers  in  those  days  purchased  their  iron 


250  THE    TARIFF    AND    THE    TRUSTS 

of  the  iron  masters,  and  it  ought  to  be  a  matter  of  in- 
terest to  our  manufacturers  to-day  to  examine  this 
opinion  given  a  hundred  and  fifty  years  ago  as  to  the 
wisdom  of  having  free  raw  materials  for  manufacture. 
A  few  out  of  the  many  reasons  given  by  these  iron 
manufacturers  for  granting  their  petition  are  found  in 
the  following  quotation : 

"I.  There  cannot  be  a  clearer  Proposition  concern- 
"ing  Trade,  than,  That  it  is  the  Interest  of  every  Manu- 
"facturing  Country  to  get  as  great  a  Choice  and  Variety 
''of  raw  Materials,  and  upon  as  cheap  Terms,  as  can 
"possibly  be  procured.  For  an  Error  in  this  respect, 
"is  fundamental,  and  hardly  to  be  corrected  by  any 
"subsequent  Care  or  Diligence.  Therefore  the  Legis- 
"lature  hath  wisely  ordained,  That  though  Wool,  for 
"Instance,  grows  in  greater  Plenty  in  England  than 
"perhaps  in  any  other  Country,  yet  the  Wools  of  all 
"Nations  shall  be  admitted  into  England  Duty-free; 
"justly  considering,  That  we  can  never  have  too  great 
"a  Choice  and  Plenty  of  that  necessary  Material  of 
"extensive  and  profitable  Industry,  or  upon  too  cheap 
"Terms. 

"11.  A  Second  Proposition,  not  inferior  either  in 
"evidence  or  Importance  is,  That  unless  some  Com- 
"modities  are  taken  from  other  Countries  by  Way  of 
"Barter  in  the  Course  of  Trade,  You  can  have  but  a 
"small  Vent  for  your  own  Manufactures ;  it  being  im- 
"possible  for  any  Nation  to  make  all  their  Payments  in 


OUR    TARIFF    HISTORY  2$ I 

"Gold  and  Silver,  even  if  they  abounded  v^ith  the  rich- 
"est  Mines  of  those  Metals.  Nay,  though  it  were  pos- 
"sible,  it  may  be  greatly  questioned,  Whether  it  is  not 
"for  the  Interest  of  a  Manufacturing  Nation  to  import 
"sometimes  raw  Materials  by  way  of  providing  for  the 
"future  Industry  of  their  People,  than  to  be  always 
"importing  Gold  and  Silver ;  which,  when  they  come 
"to  be  unconnected  with  Labour  and  Industry,  (as  in 
"this  Case  they  would  soon  be)  have  no  other  Effect, 
"than  to  introduce  Laziness,  Vanity  and  Extravagance. 
"And  in  the  End  Poverty, 

"III.  A  third  Proposition,  by  way  of  Preliminary, 
"is  this.  That  Cheapness  in  regard  to  Price,  and  Good- 
"ness  in  regard  to  Quality,  are  the  Support  and  Prop 
"of  all  Manufactures :  And  that  it  is  impossible,  in  the 
"Nature  of  Things,  for  a  Nation  to  preserve  any 
"Manufacture,  if  they  strike  off,  or  suffer  to  be  struck 
"off,  these  two  grand  Pillars,  Cheapness  and  Goodness. 
"They  may  indeed  tamper  for  a  While ;  and  seem  to  do 
"something,  not  unlike  a  Quack  in  Physic,  towards 
"botching  up  a  broken  Constitution;  but  it  will  soon 
"appear,  that  all  they  have  been  doing,  was  only  to 
"make  bad  worse."  The  principles  here  laid  down 
guide  most  protective  countries  in  the  making  of  their 
tariffs  to-day.  We  almost  alone  of  all  the  people  in 
the  world  continue  to  tax  the  raw  materials  of  manu- 
facture and  thus  make  it  difficult  for  our  manufacturers 
to  compete  vi'ith  the  rest  of  the  world. 


252  THE   TARIFF    AND   THE    TRUSTS 

Franklin,  Jefferson,  and  Madison  all  desired  free 
trade  between  England  and  the  Confederation  which 
preceded  our  present  government.  In  1783  William 
Pitt,  who  approved  the  doctrine  of  Adam  Smith,  in- 
troduced into  the  English  Parliament  a  bill  that  would 
have  secured  free  trade  between  the  countries.  Had 
it  passed,  the  hard  feelings  which  occasioned  the  war 
would  soon  have  died  out  and  the  commercial  progress 
of  both  countries  would  have  been  promoted  and  the 
War  of  1812  probably  would  have  been  prevented.  The 
Confederation  did  not  reserve  to  itself  the  control  of 
commerce  between  the  different  states,  and,  following 
Pennsylvania's  example,  other  states  passed  laws  im- 
posing duties  upon  imports  not  only  from  foreign 
countries,  but  from  the  other  states  of  the  Confedera- 
tion. The  State  of  New  York  from  its  earliest  times 
had  sought  to  foster  trade  by  legislation.  Stephanus 
Van  Cortlandt,  the  first  Mayor  of  New  York  born  in 
the  city,  enacted  many  rules  and  regulations  to  protect 
trade.  Even  the  quantity  of  brine  in  which  the  farmer 
might  immerse  his  pork  was  minutely  prescribed  and 
all  prices  were  fixed  by  ordinance.  New  York  natu- 
rally was  the  first  state  to  follow  the  lead  of  Pennsyl- 
vania, and  in  1785  she  also  passed  a  tariff  act.  The 
city  then  had  a  population  of  30,000  people,  and  had 
long  been  supplied  with  fire-wood  from  Connecticut 
and  butter  and  cheese,  chickens  and  eggs  from  New 
Jersey ;  but  the  wise  fathers  of  those  days  believed  that 


OUR   TARIFF    HISTORY  253 

in  trade  as  well  as  in  gambling  what  one  man  gained 
the  other  man  lost.  Acts  were  accordingly  passed 
obliging  every  Yankee  sloop  which  came  down  from 
Hell  Gate  and  every  Jersey  market-boat  which  was 
rowed  across  from  Power's  Hook  to  Cortland  Street 
to  pay  an  entrance  fee  and  obtain  clearance  at  the 
custom  house,  and  the  people  of  New  York  could  not 
get  a  load  of  wood  from  Connecticut  or  a  dozen  hen's 
eggs  out  of  New  Jersey  without  paying  a  duty  thereon. 
The  City  of  New  York  had  bought  a  piece  of  ground 
on  Sandy  Hook  and  had  built  a  lighthouse  there,  and 
New  Jersey  retaliated  by  levying  a  tax  of  $1800  a  year 
on  the  lighthouse  property.  The  people  of  Connecti- 
cut suspended  all  commercial  intercourse  with  New 
York.  A  great  meeting  of  business  men  was  held  at 
New  London,  and  every  merchant  signed  an  agree- 
ment, under  penalty  for  the  first  offence,  not  to  send 
any  goods  whatever  into  the  hated  state  for  a  period 
of  twelve  months.  This  was  our  first  tariff  war. 
Will  the  next  one  be  with  Germany? 

Many  protectionists  regard  Alexander  Hamilton  as 
the  father  of  our  protectionist  policy,  but  they  cannot 
find  in  any  word  or  in  any  act  of  his  a  justification  of 
our  existing  tariff.  The  people  of  the  United  States 
in  the  early  years  of  our  national  history  followed  a 
system  of  practical  free  trade.  What  is  called  the 
American  System  was  not  announced  until  1816.  The 
reason  for  our  first  tariff  of  1790  was  that  we  were 


254  THE    TARIFF    AND   THE    TRUSTS 

then  a  young  country  in  a  state  of  transition  from  an 
agricultural  to  a  more  diversified  industrial  condition. 
Nine-tenths  of  the  people  were  engaged  in  agriculture. 
Hamilton  realized  the  importance  of  bringing  about 
more  diversified  industries.  Few  of  our  people  resided 
in  cities.  Philadelphia,  the  largest  city,  had  only 
42,000  inhabitants,  New  York,  second  in  size,  32,000, 
and  Boston,  18,000.  Food  products,  tobacco,  lumber, 
rice  and  indigo  were  the  chief  products  of  agriculture. 
The  partial  transition  from  an  almost  exclusively 
agricultural  state  to  young  manufactories  involved 
capital,  methods,  plants  and  imported  workmen,  and 
it  was  hardly  an  indication  of  belief  in  high  protect- 
ive tariffs  that  under  such  circumstances  a  tariff  im- 
posing low  duties  should  have  been  enacted.  The 
wise  Madison  said:  'T  wish  we  were  under  less  neces- 
sity than  I  find  we  are  to  shackle  our  commerce  with 
duties,  restrictions,  and  preferences."  Hamilton,  in 
his  report  on  manufactures,  said  that  while  the  pay- 
ment of  bounties  for  the  encouragement  of  new  in- 
dustrial undertakings  was  justifiable,  their  ''contin- 
uance in  manufactures  long  established  was  most 
questionable."  The  actual  workings  of  the  first  tariff" 
showed  that  the  rates  upon  all  importations  were  about 
7/'2  per  cent.,  and  it  was  upon  so  few  articles  that  the 
schedule  was  printed  on  a  sheet  about  a  foot  square 
and  himg  up  in  each  -custom  house.  Slight  increases 
were  made  from  time  to  time,  but  so  slight  that  in  1808 


OUR   TARIFF    HISTORY  255 

the  duties  upon  dutiable  imports  did  not  exceed  13 
per  cent.  The  volume  of  our  total  exports  in  each  of 
the  two  years  1806  and  1807  exceeded  $100,000,000,  a 
sum  not  again  surpassed  until  1834.  These  were  the 
days  when  industries  were  really  in  their  infancy,  and 
the  great  statesmen  who  met  injustice  with  the  im- 
mortal Declaration  of  Independence,  brought  an  un- 
equal war  against  the  mighty  power  of  England  to  a 
successful  end,  and  established  our  government  under 
a  Constitution  which  Gladstone  declared  to  be  the 
greatest  ever  struck  off  at  one  time  by  the  wit  of  man ; 
these  men,  whom  all  time  will  recognize  as  statesmen, 
believed  that  duties  from  8  to  13  per  cent,  were  suffi- 
cient to  protect  our  infant  industries  against  the  world. 
Washington,  the  leading  spirit  of  those  early  years,  in 
his  farewell  address,  advised  justice  to  all  nations  and 
entangling  alliances  with  none;  Jefferson  cultivated 
friendship  with  all  the  peoples  of  the  world,  and  under 
the  guidance  of  these  men  our  people  grew  in  numbers, 
in  strength  and  in  wealth.  Such  men  were  too  great 
and  too  wise  to  believe  that  the  gain  of  one  country  in 
trading  involved  an  equivalent  loss  to  the  other,  that 
commerce  was  a  species  of  warfare,  or  that  an  imported 
article  was  an  injury  to  a  country.  This  narrow  and 
illiberal  policy  of  government  was  born  later  when  in- 
dustries had  become  established,  and  the  only  method 
of  perpetuating  injustice  was  to  arouse  prejudice  and 
passion  against  the  foreigner. 


256  THE    TARIFF    AND   THE   TRUSTS 

During  the  Embargo  of  1808  and  during  the  con- 
tinuance of  the  War  of  1812  many  establishments  for 
the  manufacture  of  cotton  goods,  woolen  cloths,  iron, 
glass,  pottery,  and  other  articles  sprang  up.  When  the 
war  was  over  men  urged  that  these  industries  were 
young  and  weak  and  required  protection  to  become 
fully  established.  So  in  1816  the  first  tariff  which 
looked  toward  protection  was  enacted,  imposing  upon 
many  articles  of  foreign  commerce  an  average  duty 
upon  dutiable  imports  of  20  per  cent.  Upon  cotton 
and  woolen  goods  imported  an  average  duty  of  about 
25  per  cent,  was  imposed.  The  making  of  pig  and  bar 
iron  had  been  regarded  as  established  at  the  time  of 
the  passage  of  the  Hamilton  Tariff,  and  it  was  not  un- 
til 18 1 6  that  Congress  was  asked  to  extend  protection 
to  it.  It  is  an  interesting  fact  that  Southern  members 
of  Congress  favored  the  tariff  of  1816  and  that  New 
England  was  opposed  to  it.  Henry  Clay  in  1816  gave 
the  reason  for  protecting  home  industries  as  follows : 
"The  object  of  protecting  manufacturers  is  that  we 
might  eventually  get  articles  of  necessity  made  as  cheap 
at  home  as  they  could  be  imported  and  thereby  produce 
an  independence  of  foreign  countries."  Since  1875 
we  have  been  imposing  duties  of  from  50  to  150  per 
cent,  upon  hundreds  of  imported  commodities  which 
we  could  manufacture  as  cheaply  at  home  as  they 
could  be  imported  without  duties,  and  our  manufactur- 
ers have  been  selling  their  domestic  products  to  the 


OUR    TARIFF    HISTORY  257 

people  during  all  this  time  at  the  price  of  the  foreign 
commodity  increased  by  nearly  the  amount  of  the  duty. 
Demosthenes  said :  ''The  first  of  all  things  is  to  see 
events  in  their  beginnings,  to  discern  tendencies  be- 
forehand and  proclaim  them  beforehand  to  others." 
This  is  exactly  what  Daniel  Webster  did  at  Faneuil 
Hall,  October  2,  1820,  when,  speaking  of  our  protect- 
ive tariff  system,  he  said  that  it  was  "a  policy  which 
no  nation  had  entered  upon  or  pursued  without  having 
found  it  to  be  a  policy  that  could  not  be  followed  with- 
out great  national  injury  nor  abandoned  without  ex- 
tensive individual  ruin."  Our  protective  tariff  has  con- 
tinued since  1883  because  the  business  interests  of  the 
country  were  afraid  of  the  financial  depression  which 
might  come  by  any  decided  change. 

During  the  War  of  1812  there  was  a  great  expansion 
of  banking,  and  wild  speculation  arose  and  continued 
until  1819,  when  a  severe  financial  crisis  occurred.  A 
fictitious  value  was  given  to  all  kinds  of  property. 
Specie  was  driven  from  circulation  as  if  by  common 
consent,  and  all  efforts  to  restore  society  to  its  natural 
condition  were  treated  with  undisguised  contempt. 
Niles'  Register,  the  leading  paper  of  that  day,  speak- 
ing of  the  speculators,  says :  "So  it  was  in  all  the  great 
cities — dash — dash — dash — vendors  of  tape  and  bob- 
bins transformed  into  persons  of  high  blood,  and  the 
sons  of  respectable  citizens  converted  into  knaves  of 
rank — through  speculation  and  the  facilities  of  the 
17 


258  THE    TARIFF    AND   THE   TRUSTS 

abominable  paper-money  system,"  Such  times  are  a 
fertile  soil  for  the  growth  of  protective  tariffs,  and 
members  of  Congress,  turning  their  minds  to  this 
method  of  stimulating  industry,  introduced  bills  in 
1820  and  1822  in  Congress  for  the  increasing  of  duties, 
but  they  did  not  pass,  and  the  next  tariff  act  is  that  of 
1824.  Party  lines  so  far  as  they  existed  in  1824  were 
not  regarded  in  the  vote  on  the  tariff.  It  was  carried 
mainly  by  the  votes  of  the  Western  and  Middle  states. 
The  Southern  members  were  opposed  to  the  law.  New 
England  was  divided,  Rhode  Island  and  Connecticut 
voting  for  the  bill,  Massachusetts  and  the  other  New 
England  states  against  it.  John  Randolph  said  of  this 
tariff:  "The  merchants  and  manufacturers  of  New 
Hampshire  repel  this  bill,  while  men  in  hunting  shirts, 
with  deerskin  leggings  and  mocassins  on  their  feet, 
want  protection  for  home  manufacturers."  The  fac- 
tories in  the  East  in  those  early  days  were  of  a  higher 
grade  in  comparison  to  those  of  like  kind  in  the  Middle 
or  Western  states  than  were  the  English  factories  to 
those  of  the  Eastern  states.  Notwithstanding  this  fact, 
the  factories  of  the  middle  West  have  come  up  to  as 
great  if  not  a  greater  degree  of  perfection  than  those 
of  the  East.  The  competition  between  Eastern  fac- 
tories and  the  factories  of  the  middle  West  has  been 
going  on  for  fifty  years  and  the  infant  industries  of  the 
West  have  never  conceived  for  one  moment  that  they 
needed  protection  against  their  more  powerful  neigh' 
bors  in  the  East. 


OUR    TARIFF    HISTORY  259 

Under  the  Tariff  of  1824  the  duty  on  imports  of  cot- 
ton and  woolen  goods  was  raised  from  25  to  33^/2  per 
cent.  The  increase  upon  imports  of  woolen  was  off- 
set, however,  by  a  duty  of  30  per  cent,  upon  wool, 
w'hich  before  that  time  had  been  admitted  at  15  per 
cent.  In  1827  an  attempt  was  made  in  Congress  to 
pass  a  bill  increasing  the  duties  upon  woolens.  It  was 
passed  in  the  House,  but  lost  in  the  Senate  by  the  cast- 
ing vote  of  Vice-President  Calhoun.  Thereupon  a 
convention  of  protectionist  manufacturers  and  ambi- 
tious politicians  gathered  in  the  midsummer  of  1827  at 
Harrisburg.  It  recommended  higher  duties  for  the  aid 
of  agriculture  and  also  on  the  manufactures  of  wool, 
hemp,  flax,  iron,  and  glass.  This  convention,  it  was 
claimed,  had  been  called  to  further  the  political  ambi- 
tions of  President  John  Quincy  Adams.  The  tariff  had 
not  been  a  political  issue  up  till  this  time.  The  Eastern 
states  had  been  engaged  largely  in  shipbuilding  and 
the  merchants  of  Boston  and  other  large  cities  were 
importers,  but  during  the  War  of  1812  and  prior  to 
1827  there  had  been  a  great  increase  in  the  number  of 
cotton  and  woolen  factories  in  the  New  England  States. 
These  interests  had  now  become  powerful  and  were 
contending  for  further  protection.  Jackson  was  a 
candidate  for  the  Presidency,  and  behind  him  were  the 
Southern  men  who  were  opposed  to  protection.  He 
needed  Pennsylvania  and  New  York,  which  were  the 
controlling  factors  in  his  contest  against  Adams.     A 


26o  THE   TARIFF    AND   THE    TRUSTS 

majority  in  the  House  of  Representatives  were  favor- 
able to  his  election,  and  when  Congress  convened  a 
committee  in  the  House,  consisting  of  five  Jackson 
men  and  two  Adams  men,  were  appointed  to  consider 
the  question  of  the  tariff.  Their  action  shows  that 
the  great  men  who  had  shaped  the  policy  of  this  coun- 
try in  the  early  days  were  passing  away  and  that  the 
politician  was  coming  to  the  front.  This  committee 
deliberately  framed  a  bill  imposing  such  high  duties 
on  iron,  hemp,  flax,  wool,  molasses,  and  sail  cloth  that 
it  was  thought  that  the  followers  of  Adams  would  vote 
against  it.  The  Southern  members  openly  said  that 
they  meant  to  make  the  tariff  so  bitter  a  pill  that  no 
New  England  member  would  be  willing  to  swallow  it. 
Calhoun  years  afterwards,  in  1837,  frankly  disclosed 
the  plot  of  the  Southern  members  of  that  time  and 
Martin  Van  Buren  was  said  to  have  been  the  man  who 
suggested  this  means  of  heading  off  the  passage  of  a 
tariff.  The  Eastern  Congress  men  were  loyal  to 
Adams  and  they  were  afraid  to  reject  this  tariff  for 
fear  of  its  effect  upon  his  election.  So  it  became  a 
law,  and  was  known  as  the  Tariff  of  Abominations. 
It  imposed  an  average  ad  valorem  rate  of  duty  of 
48.88  per  cent.,  the  highest  known  in  this  country  be- 
fore the  McKinley  Act  of  1890.  For  the  first  time 
compound  duties,  specific  and  ad  valorem  combined, 
were  levied.  Jackson  was  elected,  and  both  the 
Adams  and  Jackson  men  united  in  condemning  this 


OUR   TARIFF    HISTORY  26 1 

tariff.  It  was  superseded  by  the  tariff  of  1832,  which 
practically  restored  the  tariff  of  1824.  Even  this 
more  moderate  tariff  could  not  stand  the  attacks  of  the 
Southern  men,  and  in  the  following  year  the  com- 
promise tariff  was  passed.  By  the  compromise  tariff 
of  1833  it  was  provided  that  all  duties  which  in  that 
tariff  exceeded  20  per  cent,  were  to  have  one-tenth  of 
the  excess  over  20  per  cent,  taken  off  on  January  i, 
1834;  one-tenth  more  on  January  i,  1836;  one-tenth  in 
1838;  and  another  in  1840.  Having  disposed  of  four- 
tenths  of  the  duty  over  20  per  cent,  by  1840,  it  w^as 
then  provided  that  on  January  i,  1842,  one-half  of  the 
remaining  excess  was  to  be  removed,  and  on  July  i, 
1842,  the  other  half  was  to  go,  leaving  the  tariff  at  20 
per  cent.  The  duties  remained  high  during  the  whole 
period  till  1842,  thus  the  average  ad  valorem  rate  of 
duty  on  actual  imports  was  in 

1834  32.67% 

1836  31-65% 

1838  37.84% 

1840  30.37% 

1842  24.00% 

Notwithstanding  the  duties  were  continued  so  high, 
protectionists  twenty  or  thirty  years  later  invented  the 
theory  that  the  tariff  of  1833  was  the  cause  of  the  ter- 
rible financial  crisis  which  swept  over  the  country  in 
1837.  Professor  Taussig,  in  his  excellent  "History  of 
the  Tariff,"  says  that  this  contention  had  its  origin  in 
the  writings  of  Henry  C.  Carey  "who  has  been  guilty 


262  THE    TARIFF    AND    THE    TRUSTS 

of  many  curious  versions  of  economic  history,  but  of 
none  more  remarkable  than  this.  It  may  be  found  in 
the  various  passages  in  his  works;  and  from  these  it 
has  been  transferred  to  the  writings  of  his  disciples 
and  to  the  arguments  of  protectionist  authors  and 
speakers  in  general.  Yet  no  fair-minded  person,  hav- 
ing even  a  superficial  knowledge  of  the  economic  his- 
tory of  these  years,  can  entertain  such  notions."  You 
may  look  through  all  the  speeches  in  Congress  in  1837 
and  following  years,  you  may  examine  all  the  news- 
papers of  that  day,  and  you  will  fail  to  find  anywhere 
by  anyone  at  that  time  a  claim  of  any  relation  between 
the  tarifif  of  1833  and  the  financial  crisis  of  1837.  The 
cause  of  the  crisis  of  1837  can  be  shown  in  a  few 
facts.  In  1833  President  Jackson  transferred  from 
the  United  States  Bank  the  surplus  of  $40,000,000  and 
distributed  it  among  the  state  banks  scattered  through 
the  different  states  in  the  Union.  We  had  no  national 
debt,  the  expenses  of  government  were  comparatively 
small,  and  the  protective  tariff  as  usual  had  resulted 
in  a  surplus.  In  our  day  the  politicians  know  what  to 
do  with  a  surplus,  and  quickly  dispose  of  it  to  remove 
any  objections  to  protection.  The  state  banks  com- 
menced loaning  their  new  deposits  to  land  speculators. 
Boom  towns  like  the  malarial  Eden  described  in 
"Martin  Chuzzlewit"  appeared  all  over  the  country. 
Lands  far  away  from  roads  and  rivers  in  the  Maine 
forests  sold  for  fabulous  prices.     The  real  estate  of 


OUR    TARIFF    HISTORY  263 

New  York  was  assessed  for  more  in  1836  than  it  was 
in  1 85 1.  In  May,  1836,  Mr.  Webster  introduced  a  bill 
in  the  Senate  directing  that  $35,000,000  of  the  $40,000,- 
000  deposited  by  President  Jackson  should  be  apporr 
tioned  among  the  states  and  paid  over  by  the  banks  in 
quarterly  installments  beginning  January  i,  1837.  This 
bill  was  passed  and  signed  by  President  Jackson. 
Prior  to  1834  the  average  annual  sale  of  public  lands 
for  settlement  had  been  $2,500,000,  in  1836  it  had  risen 
to  $26,000,000,  and  the  public  lands  were  being  paid 
for  by  state  bank  notes.  In  July,  1836,  President 
Jackson,  alarmed  at  the  terrible  mania  of  speculation 
and  paper  money,  issued  a  circular  requiring  the  pay- 
ments for  lands  to  be  made  in  specie,  hoping  thus  to 
check  the  wild  land  speculation  of  the  time.  On  Janu- 
ary I,  1837,  the  first  installment  of  the  surplus  was 
paid  over  by  the  banks,  the  packages  of  specie  and  bank 
notes  of  the  installments  being  drawn  in  the  coaches  or 
mud  wagons  of  the  day  over  rough  roads  to  the  state 
capitals  of  the  dififerent  states.  The  second  installment 
in  April  was  paid,  but  the  banks  could  not  get  the 
specie  for  the  third  installment,  and  the  financial  crash 
came  as  a  consequence.  Mr.  Webster,  speaking  in 
New  York  City  in  1837,  ascribed  the  panic  to  the  above 
named  causes  and  a  committee  sent  from  New  York 
to  Washington  to  ask  President  Van  Buren  to  rescind 
the  specie  circular  attributed  it  to  the  same  causes. 
Henry  Clay,  the  father  of  the  American  system  of  pro- 


264  THE   TARIFF    AND   THE    TRUSTS 

tection,  speaking  in  the  United  States  Senate  in  1842 
on  the  panic  of  1837  and  its  causes,  said :  "It  is  a  great 
mistake  to  say  that  any  portion  of  the  embarrassment 
of  the  country  resulted  from  it  (the  tariff  of  1833). 
Other  causes  have  contributed  to  this  result,  and  it 
is  to  be  attributed  to  experiments  made  upon  the  cur- 
rency ;  also  to  the  action  of  the  states,  which,  by 
plunging  into  schemes  of  internal  improvements  have 
made  debts  abroad,  and  thereby  given  a  false  appear- 
ance to  the  prosperity  of  the  country,  and,  when  their 
bonds  depreciated,  the  evils  from  which  they  now  suf- 
fer as  a  consequence  ensued."  Hugh  McCulloch, 
Secretary  of  the  Treasury  under  three  administrations, 
was  in  1837  the  manager  of  a  bank  at  Fort  Wayne, 
Indiana,  and  a  member  of  the  Board  of  Control  in  the 
State  Bank  of  Indiana.  Writing  to  the  New  York 
Times  on  February  3,  1890,  he  describes  most  vividly 
the  speculative  mania  of  those  days,  and  ascribes  the 
panic  of  1837  solely  to  the  same  causes  as  Mr.  Clay. 
The  protectionist  manufacturer  regards  as  prosperous 
only  those  times  when  the  surplus  money  of  the  people 
congests  in  his  hands.  But  a  portion  of  the  surplus 
apparently  filters  down  through  his  hands  to  the  hands 
of  men  who  pervert  history  to  sustain  the  cruel  in- 
justice by  which  he  profits.  The  treatment  of  the  panic 
of  1837  by  protectionists  is  a  marked  instance  of  such 
perversion. 

Before  leaving  the  period  prior  to  1842,  it  is  impor- 


OUR   TARIFF    HISTORY  265 

tant  to  observe  that  the  industry  of  cotton  and  wool 
had  arrived  even  in  those  days  to  a  condition  of  such 
cheapness  of  manufacture  as  to  be  no  longer  in  need  of 
protection.  In  the  first  chapter  of  this  volume  I  have 
mentioned  the  testimony  of  the  wool  manufacturers 
before  the  Committee  on  Ways  and  Means  of  the 
House  of  Representatives  in  1828.  As  to  the  cotton 
industry,  Professor  Taussig,  in  his  "History  of  the 
Tariff,"  says:  "Probably  as  early  as  1824,  and  almost 
certainly  by  1832,  the  industry  had  reached  a  firm  po- 
sition in  which  it  was  able  to  meet  foreign  competition 
on  equal  terms,  Mr.  Nathan  Appleton,  who  was  a 
large  owner  of  cotton  factory  stocks,  and  who  was  al- 
so, in  his  time,  one  of  the  ablest  and  most  prominent 
advocates  of  protective  duties,  said  in  1833  that  at  that 
date  coarse  cottons  could  not  have  been  imported  from 
England  if  there  had  been  no  duty  at  all,  and  that  even 
on  many  grades  of  finer  goods  competition  was  little 
to  be  feared.  This  account  of  the  stage  reached  by 
the  industry  finds  confirmation  in  a  careful  volume  on 
the  cotton  manufacture  in  the  United  States  published 
in  1840  by  Robert  Montgomery.  "This  WTiter's  gen- 
eral conclusions,"  says  Professor  Taussig,  "are  much 
the  same  as  those  which  competent  observers  reach  for 
our  own  time.  Money  wages  were  about  twice  as 
high  in  the  United  States,  but  the  product  per  spindle 
and  per  loom  was  considerably  greater."  Sixty-five 
years  after  this  date,  with  all  the  improvements  which 


266  THE    TARIFF    AND   THE    TRUSTS 

we  have  made  in  machinery  for  the  making  of  cotton 
cloth,  the  cotton  manufacturers  are  actually  enjoying 
an  average  ad  valorem  rate  of  duty  on  imports  of  cot- 
ton of  49.41  per  cent.,  while  the  woolen  manufactur- 
ers, including  the  duty  on  raw  wool,  are  protected  in 
the  amount  of  about  94  per  cent,  upon  the  importations 
of  woolen  goods. 

In  1842  the  Whigs  passed  a  new  tariff  bill,  imposing 
upon  foreign  imports  an  average  ad  valorem  duty  on 
actual  imports  of  32  per  cent.  During  the  four  years 
that  this  tariff*  continued  the  iron  industries  of  the 
country  increased  rapidly.  In  1832  Congress  had  per- 
mitted the  importation  of  iron  rails  for  the  new  rail- 
ways being  built  at  that  time  without  duty,  and  under 
that  act  they  continued  to  be  imported  until  1842. 
Protectionists  have  always  claimed  that  the  growth  in 
the  iron  industry  which  followed  the  enactment  of  the 
tariff  of  1842  resulted  from  the  increase  of  duties  upon 
iron  and  its  manufactures  ;  but  that  growth  is  attributed 
by  experts  in  the  iron  trade  of  those  years  to  the  com- 
mencement of  the  use  of  anthracite  coal  in  the  making 
of  pig  iron  in  1840  and  to  the  introduction  of  the 
process  of  making  pig  iron  by  puddling  about  the  same 
time. 

This  completes  the  history  of  the  Whig  party  as  the 
makers  of  tariffs,  and  it  is  to  be  observed  that  they  at- 
tempted to  protect  American  industries  while  the  tariff 
makers  of  to-day  are  protecting  gigantic  monopolies. 


OUK     lARIFF    HISTORY  267 

The  old  Whigs,  however  mistaken,  provided  protection 
for  the  American  people.  The  modern  American 
protectionist  advocates  protection  against  the  American 
consumer  and  in  favor  of  the  European  consumer.  In 
the  days  we  have  been  describing  the  protective  policy, 
although  unwise,  may  have  been  honestly  commenced 
and  continued  by  Congress.  To-day  it  is  graft,  simply 
an  alliance  between  corrupt  politicians  and  manufac- 
turers, who  do  not  think  it  wrong  directly  or  indirectly 
to  buy  such  legislation.  The  mistake  in  our  day  has 
been  in  permitting  a  force  outside  of  government  to 
be  created  that  is  powerful  enough  to  control  govern- 
ment in  spite  of  the  people.  This  force  is  becoming 
so  powerful  and  so  corrupt  that  it  seeks  to  control  the 
editor  in  his  sanctum  and  the  professor  in  his  lecture- 
room.  Independence  recoils  from  its  power  and  free 
thought  and  free  speech  are  absolutely  endangered  by 
its  existence. 

The  Walker  Tariff,  named  for  Robert  J.  Walker,  the 
Secretary  of  the  Treasury  during  the  presidency  of 
James  K.  Polk,  was  enacted  in  1846.  Mr.  Walker  laid 
down  the  following  principles  as  those  upon  which  this 
tariff  was  based: 

"i.  That  no  more  money  should  be  collected  than 
is  necessary  for  the  wants  of  government, 

"2.  That  no  duty  should  be  imposed  upon  any  arti- 
cle above  the  lowest  rate  which  will  yield  a  just  amount 
of  revenue. 


268  THE    TARIFF    AND   THE    TRUSTS 

"3.  That  below  such  rate  discrimination  may  be 
made,  descending  in  the  scale  of  duties,  or  for  imper- 
ative reasons  the  article  may  be  placed  upon  the  free 
list. 

"4.  That  the  maximum  revenue  duty  should  be  im- 
posed upon  all  luxuries. 

"5.  That  all  minimum  and  specific  duties  should 
be  abolished  and  ad  valorem  duties  substituted  in  their 
place." 

The  prevailing  duties  on  dutiable  imports  under  this 
tariff  was  25  per  cent.  It  remained  in  force  until  1857, 
when  a  still  further  reduction  of  duties  was  made.  The 
revenue  from  the  tariff  was  such  that  a  surplus  had  ac- 
crued in  the  Treasury.  The  Act  of  1857  reduced  the 
duties  to  about  18  per  cent,  and  became  a  law  on  March 
3,  1857.  The  House  of  Representatives  at  that  time 
was  composed  of  83  Democrats,  108  Republicans  and 
43  other  members  known  as  "Know  Nothings."  The 
Senate  was  Democratic.  The  practical  results  of  the 
Walker  Tariff  had  been  so  favorable  and  the  prosperity 
of  the  country  during  the  eleven  years  of  its  existence 
had  been  so  marked  that  a  considerable  proportion  of 
the  Republican  party  in  that  day  voted  for  the  reduc- 
tion. Mr.  Morrill,  of  Vermont,  a  member  of  the  Ways 
and  Means  Committee  in  1857,  argued  for  a  reduction. 
Every  Republican  member  from  New  England  present 
at  the  time  the  vote  was  taken  voted  for  the  reduction 
and  every  member   from  New  England,  except  Mr. 


OUR   TARIFF    HISTORY  269 

Collamer  from  Vermont,  had  voted  against  the  Walker 
Tariff  in  1846.  Mr.  Blaine,  in  his  "Twenty  Years  in 
Congress,"  says :  "Moreover  the  tariff  of  1846  was 
"yielding  abundant  revenue,  and  the  business  of  the 
"country  was  in  a  flourishing  condition  at  the  time  his 
"(Polk's)  administration  was  organized.  Money 
"became  very  abundant  after  the  year  1849;  large  en- 
"terprises  were  undertaken ;  speculation  was  prevalent, 
"and  for  a  considerable  period  the  prosperity  of  the 
"country  was  general  and  apparently  genuine.  After 
"1852  the  Democrats  had  almost  undisputed  control 
"of  the  government,  and  had  gradually  become  a  free- 
"trade  party.  The  principles  embodied  in  the  tariff  of 
"1846  seemed  for  the  time  to  be  so  entirely  vindicated 
"and  approved  that  resistance  to  it  ceased,  not  only 
"among  the  people  but  among  protection  economists, 
"and  even  among  the  manufacturers  to  a  large  extent. 
"So  general  was  the  acquiescence  that  in  1856  a  pro- 
"tective  tariff  was  not  even  suggested  or  even  hinted  by 
"any  one  of  the  three  parties  which  presented  presi- 
"dential  candidates.  ...  By  this  law  the  duties  were 
"placed  lower  than  they  had  been  at  any  time  since  the 
"War  of  1812.  The  act  was  well  received  by  the  peo- 
"ple  and  was  indeed  concurred  in  by  a  considerable 
"proportion  of  the  Republican  party."  When  the 
proposed  law  had  passed  the  House  of  Representatives 
and  reached  the  Senate,  it  received  the  support  of  Mr. 
Hamilton  Fish,  one  of  the  Republican  Senators  from 


2/0  THE    TARIFF    AND   THE    TRUSTS 

New  York,  and  the  vote  of  Senator  Sumner,  who  was 
so  anxious  that  the  bill  be  passed  that  he  left  a  bed  of 
illness  in  Boston  and  went  to  Washington  to  vote  for 
the  bill.  It  received  the  support  of  Senator  Wilson 
then  Senator  from  Massachusetts,  of  Senator  Bell  of 
New  Hampshire,  of  Senator  Allen  of  Rhode  Island, 
of  Senators  Collamer  and  Foote  of  Vermont,  of  Sena- 
tor Fessenden  of  Maine,  and  of  Senators  Foster  and 
Toucy  of  Connecticut.  Senator  Wilson,  of  Massa- 
chusetts, speaking  in  the  Senate  in  favor  of  this  bill, 
said:  "We  of  New  England  believe  that  hemp,  flax, 
silk,  lead,  tin,  copper,  hides,  linseed,  and  other  articles 
should  be  admitted  duty  free.  We  are  for  the  reduc- 
tion of  the  revenue  to  the  actual  wants  of  an  economical 
administration  of  the  government,  for  the  depletion  of 
the  treasury  now  full  of  hoarded  gold." 

I  hesitate  about  giving  figures  showing  the  great 
prosperity  of  agriculture  and  manufacturing  during 
the  period  from  1846  to  1861  lest  I  may  be  regarded  as 
adopting  that  method  of  proof  of  the  good  effects  of  a 
law  upon  the  welfare  of  society.  The  American  pro- 
tectionist has  his  statistical  abstract  in  hand,  and  shows 
you  the  progress  in  the  United  States  during  the  ex- 
istence of  our  outrageous  tariff  as  proved  by  each  year's 
return.  Every  step  of  advancement  and  development 
he  modestly  puts  down  to  protection  and  gives  no 
credit  to  our  immense  natural  resources,  inventive 
talent,  individual  energy,  or  freedom  from  traditional 


OUR    TARIFF    HISTORY  27I 

restraints.  Our  prosperity  at  any  given  time  may  be 
attributed  much  more  to  natural  causes  than  to  the 
existence  of  the  tariff.  Without  a  comprehensive  view 
of  historic  facts  and  of  economic  subjects  no  man  can 
even  give  a  good  guess  as  to  the  benefits  which  have 
accrued  to  a  country  from  the  existence  of  low  tariffs 
or  high  tariffs.  Each  four  years  we  are  entertained 
by  speakers  who  with  drum  and  trumpet  declamation 
enlighten  us  with  the  statement  that  we  owe  all  of  our 
prosperity  to  the  tariff.  Twenty  lines  of  customs 
houses  divide  the  industrial  people  of  Europe.  Here 
the  people  scattered  over  three  million  and  a  half  square 
miles  of  territory  have  absolute  free  trade  between 
states.  Our  people  are  possessed  of  the  most  resistless 
energy  which  has  ever  appeared  in  all  history  among 
any  people  in  the  world.  Our  population  is  replenished 
each  year  by  about  a  million  immigrants  bringing  not 
only  millions  of  money,  but,  better  still,  fresh  young 
life,  energy  and  capacity  to  earn  money  and  to  create 
wealth.  We  use  more  labor-saving  machinery  than 
all  the  rest  of  the  world  combined.  The  St.  Lawrence 
River  and  the  Great  Lakes  extend  more  than  a  thou- 
sand miles  inland  and  give  us  such  a  means  of  internal 
commerce  as  no  other  country  in  the  world  possesses. 
Our  railways  convey  our  products  to  the  sea  board  at 
the  lowest  rates  known  in  the  world,  and  yet  each  four 
years  the  demagogue  upon  the  stump  entertains  the 
American  people  with  the  same  old  story  that  we  owe 


2/2  THE    TARIFF    AND   THE    TRUSTS 

all  of  our  prosperity  to  protective  tariffs.  Without 
claiming  the  prosperity  existing  between  1846  and 
i860  as  a  sole  result  of  protective  tariffs,  let  me  give 
you  the  statistics.  The  national  wealth  as  shown  by 
the  census  of  1850  was  $7,136,000,000.  After  10  years 
of  the  Walker  Tariff,  as  reduced  in  1857,  the  national 
wealth  had  increased,  according  to  the  census  of  i860, 
to  $16,160,000,000,  an  increase  of  126  per  cent.,  the 
greatest  percentage  of  increase  that  has  ever  occurred 
in  the  history  of  the  country  in  any  ten  years'  period. 
In  1850,  according  to  Mr.  Carroll  D.  Wright's  work 
entitled  "Industrial  Evolution  of  the  United  States," 
the  capital  employed  in  manufacturing  in  the  United 
States  was  $533,000,000  in  round  numbers.  In  i860 
it  had  gone  up  to  $1,009,000,000  an  increase  of  89.4 
per  cent.  When  we  compare  this  growth  in  manu- 
facturing with  the  ten  years  between  1890  and  1900, 
we  find  that  in  1890  the  capital  employed  in  manu- 
facturing was  $6,500,000,000;  in  1900  $9,800,000,000, 
or  an  increase  of  50.7  per  cent.,  as  against  89.4  per  cent, 
between  1850  and  i860.  The  increase  in  the  products 
of  manufacture  from  1850  to  i860  was  85.1  per  cent. 
The  increase  between  1890  and  1900  was  38.9  per  cent, 
only,  or  less  than  half  the  amount.  Between  1850  and 
i860  the  railway  mileage  of  the  country  increased  from 
9,000  miles  to  30,600  miles,  an  increase  of  over  300  per 
cent.,  while  from  1890  to  1900  it  increased  19  per  cent. 
In  Grosvenor's  "Does  Protection  Protect?"  appears  a 


OUR   TARIFF    HISTORY  273 

table  showing  the  imports  and  exports  per  head  of 
population  between  1843  and  i860  in  which  it  is  stated 
that  the  annual  average  per  head  of  population  was : 

Imports  Exports 

In     1843-46 $  4-66  $5-22 

In     1847-50 6.3s  6.32 

In     1851-55 9.10  7.35 

In     1856-60 10.41  9.45 

The  imports  and  exports  in  million  dollars  were : 

Imports  Exports 

Annual  average  of  the  four  years   1843-46 92.7  100 

"              "          "     "        "         "       1847-50 138.3  136.8 

"              "          "     "      five       "       1851-55 231  i86.2 

"              "          "     "        "         "       1856-60 30s  278.2 

But  the  protectionists  will  tell  you  that  in  October 
of  1857,  about  seven  months  after  the  passage  of  the 
Act  of  1857  reducing  the  duties,  a  great  panic  oc- 
curred, and  that  its  cause  was  the  reduction  of  the 
tariff.  The  crisis  was  anticipated  at  the  time  the  tariff 
was  passed.  A  surplus  had  accumulated  in  the  United 
States  Treasury,  and  the  tariff  was  passed  with  the 
hope  that  it  would  serve  to  prevent  the  crisis,  and  that 
the  money  in  the  treasury  would  get  out  among  the 
people  in  time  to  prevent  the  stringency  which  was  al- 
ready threatening.  In  August  the  Ohio  Life  and  Trust 
Company,  a  chartered  banking  institution  with  two 
millions  of  capital  and  the  agency  for  a  large  section 
of  the  West,  suddenly  failed.  Its  capital  had  been 
practically  embezzled.  Banks  had  been  multiplying 
throughout  the  country  during  the  period  from  1846 
with  great  rapidity.  In  1851  a  bank  was  started  in  the 
18 


274  THE   TARIFF   AND   THE   TRUSTS 

City  of  New  York  for  every  month  in  the  year.  New 
York  had  become  the  banking  center  of  the  country, 
and  between  July  and  October  of  1857  they  called  in 
their  loans  to  the  amount  of  30  per  cent.  Upon  the 
failure  of  the  Ohio  Life  and  Trust  Company,  a  panic 
seized  the  New  York  banks,  and,  instead  of  standing 
by  each  other,  they  attempted  to  look  out  each  for  it- 
self, and  precipitated  a  crash  throughout  the  country. 
The  inflation  caused  by  the  Wild  Cat  State  Bank  bills, 
which  were  in  circulation  in  those  days,  had  led  to  so 
much  speculation  that  a  general  panic  over  the  coun- 
try followed,  but  it  was  of  short  duration.  Professor 
Sumner,  of  Yale,  in  his  "History  of  American  Cur- 
rency," says  of  the  panic  of  1857 :  "The  state  of  the 
currency  was  generally  recognized  as  the  root  of  the 
trouble."  When  Republicans  with  Whig  antecedents 
attempted  to  pass  an  act  increasing  the  duties  in  1859, 
they  failed.  Alexander  H.  Rice,  of  Massachusetts,  a 
member  of  the  House,  and  actively  engaged  in  manu- 
facturing, said  when  the  bill  increasing  the  duties  was 
under  discussion:  "The  manufacturer  asks  no  addition- 
al protection.  He  has  learned  that  the  greatest  evil, 
next  to  a  ruinous  foreign  competition,  is  excessive  pro- 
tection, which  stimulates  a  ruinous  and  irresponsible 
competition  at  home."  They  had  not  learned  in  those 
days,  as  have  our  trust  magnates  to-day,  to  form  trust 
combinations  and  smash  the  competition  by  excessively 
low  prices  in  each  locality  where  it  appears,  and  having 


OUR   TARIFF    HISTORY  275 

destroyed  it  then  to  charge  excessive  prices  to  all  con- 
sumers. In  the  year  i860  our  country  exhibited  to 
the  world  the  greatest  prosperity  it  had  ever  known, 
and  our  exports  in  that  year  were  considerably  larger 
than  in  any  prior  year  in  the  history  of  the  country. 

The  duty  enacted  in  1857  failed  to  supply  sufficient 
revenue  for  the  support  of  the  government  and  the 
Republicans  prepared  a  bill  increasing  the  duties  which 
became  a  law  in  April,  1861.  Then  followed  a  series 
of  acts  known  as  the  war  tariffs.  Nearly  every  month 
of  the  war  some  change  was  made  in  the  duties  in 
order  to  increase  the  revenue.  Manufacturers  did  not 
apply  to  Congress  for  an  increase  of  duties  as  they  do 
now,  but  the  duties  were  imposed  for  the  purpose  of 
obtaining  revenue  to  support  the  government  and  of 
making  return  to  the  manufacturers  for  the  heavy  in- 
ternal taxes  imposed.  On  July  14,  1862,  ]\Ir.  Morrill, 
of  Vermont,  then  Chairman  of  the  Ways  and  Means 
Committee,  introduced  a  bill  in  the  House  of  Repre- 
sentatives entitled  "An  Act  increasing  temporarily  the 
duties  on  imports  and  for  other  purposes."  Internal 
duties  were  again  increased  and  to  counterbalance 
these  another  increase  of  import  duties  was  decreed  by 
the  Act  of  June  30,  1864.  No  statesman  in  those  days 
attempted  to  justify  these  laws  except  upon  the  ground 
of  the  demands  of  war.  For  twenty  years  after  the 
war  these  tariffs  were  known  as  the  War  Tariff. 
When  introducing  the  Act  of  1864,  Mr.  Morrill  said: 


T.'jd  THE   TARIFF   AND   THE   TRUSTS 

"The  present  bill  is  not  likely  to  suit  everybody,  and  I 
regard  it  as  only  a  temporary  measure  fit  to  be  intro- 
duced because  of  the  imperious  necessities  of  our 
present  condition."  And  again  he  says :  "Although  our 
present  tariff  in  ordinary  times  would  be  likely  to  be 
denounced  as  prohibitive,  the  present  bill  is  indispen- 
sable to  preserve  the  aggregate  of  our  internal  revenue. 
When  we  impose  a  tax  of  5  per  cent,  on  our  manu- 
facturers and  increase  the  tariff  to  the  same  extent  upon 
foreign  manufacturers,  we  leave  them  upon  the  same 
relative  footing  that  they  were  at  the  start."  Internal 
or  excise  duties  were  imposed  in  1864  and  prior  thereto 
of  $2  a  ton  upon  pig  iron,  $3  a  ton  upon  railroad  iron, 
2  cents  a  pound  upon  sugar,  6  cents  a  hundredweight 
upon  salt,  and  2  cents  a  pound  on  raw  cotton.  The 
amount  of  these  internal  taxes  was  estimated  at 
about  15  per  cent.  In  1864  was  passed  the  highest 
duty  of  the  war,  increasing  the  average  duty  upon  im- 
ports under  the  Act  of  1862  of  37.2  per  cent,  to  47.6 
per  cent.  It  was  expressly  understood  that  its  pas- 
sage was  not  only  for  the  purpose  of  raising  revenue 
for  the  support  of  government,  but  for  the  purpose  of 
making  a  return  to  the  manufacturers  for  the  internal 
revenue  duties  upon  their  products.  This  is  shown 
not  only  by  the  quotation  from  Mr.  Morrill's  statement 
to  the  House  above,  but  by  the  fact  that  the  bill  was 
introduced  on  the  2nd  day  of  June,  1864,  and  debated 
only  for  a  day  before  its  passage,  that  it  went  to  the 


OUR   TARIFF   HISTORY  277 

Senate,  and  was  there  passed  in  a  very  short  time,  and 
that  no  special  consideration  was  given  to  it,  the  whole 
debate  in  both  houses  being  to  the  effect  that  it  was 
simply  a  temporary  act  for  revenue  and  for  the  pur- 
pose of  making  return  to  the  manufacturers  for  the 
internal  taxes.  The  Act  of  1864,  however,  is  the  basis 
of  our  present  tariff,  and  instead  of  being  reduced  the 
protective  duties  imposed  by  it  have  been  greatly  in- 
creased from  time  to  time.  For  nearly  forty  years 
Congress  has  been  steadily  selecting  from  the  Act  of 
1864  every  product  which  did  not  compete  with  a  home 
product  and  repealing  the  duty  thereon,  while  it  has 
been  steadily  increasing  duties  on  the  importation  of  all 
products  which  came  into  competition  with  home  prod- 
ucts. To-day  duties  are  imposed  simply  to  create 
monopoly.  The  internal  revenue  taxes  of  the  war 
were  repealed  because  the  citizen  knew  he  was  paying 
them,  while  the  tariff,  which  takes  his  property  so 
deftly  that  he  does  not  appreciate  it,  has  not  only  been 
continued  but  increased. 

In  1867  Mr.  David  A.  Wells,  then  Special  Commis- 
sioner of  the  Revenue  and  at  that  time  a  protectionist, 
although  afterwards  one  of  the  most  able  and  earnest 
of  free  traders,  prepared  a  bill  proposing  reductions  in 
the  duties  on  raw  materials  such  as  scrap  Iron,  coal, 
lumber,  hemp,  and  flax.  This  bill  passed  the  Senate, 
but  failed  to  pass  the  House. 

During  the  war  there  was  a  stoppage  of  the  supply 


278  THE   TARIFF   AND   THE   TRUSTS 

of  raw  cotton  and  the  production  of  wool  and  woolens 
increased.  After  the  war  the  government  no  longer 
needed  its  woolens  and  they  were  thrown  upon  the 
market,  the  result  being  a  depression  in  the  woolen 
trade.  As  a  consequence,  in  December,  1865,  a  few 
manufacturers  of  carpets,  worsted  goods  and  blankets 
called  a  convention  at  Syracuse,  New  York,  of  wool 
growers  and  manufacturers  for  the  purpose  of  pro- 
curing from  Congress  a  law  increasing  the  duties  up- 
on wool.  These  duties  were  already  very  high,  but  the 
manufacturers  agreed  with  the  wool  producers  to  give 
them  any  duties  they  wished  upon  the  raw  material  if 
the  wool  growers  would  aid  them  in  procuring  an  in- 
creased duty  upon  the  manufactured  cloth,  and  the  re- 
sult was  the  Act  of  1867,  whose  main  provisions  are 
retained  in  the  Dingley  Tariff  of  1897.  By  the  terms 
of  this  act  wool  was  divided  into  three  classes,  carpet, 
clothing,  and  combing  wool.  The  first  class  included 
a  grade  of  wool  not  produced  in  this  country,  but  the 
other  two  classes  of  clothing  and  combing  wools  were 
made  to  pay  duties  as  follows : 

Value  32  cents  or  less,  duty  of  10  cents  per  pound 
and  II  per  cent,  ad  valorem. 

Value  more  than  32  cents,  a  duty  of  12  cents  per 
pound  and  10  per  cent,  ad  valorem. 

This  duty  of  1867  was  about  double  the  duty  of  1864, 
and  the  result  was  that  the  grade  of  wool  chiefly  used 
in  the  making  of  clothing  was  doubled  in  price.     To 


OUR   TARIFF   HISTORY  279 

arrive  at  the  compensatory  duties  of  the  manufacturer 
upon  imported  woolen  cloth,  it  was  calculated  that 
four  pounds  of  wool  was  used  in  making  a  pound  of 
cloth,  and  if  imported  a  duty  of  four  times  ii^^  cents, 
or  46  cents,  should  be  the  compensating  duty.  Then, 
to  include  dyes  and  other  expenses,  it  was  fixed  at  50 
cents  per  pound  and  35  per  cent,  ad  valorem  on  im- 
ported woolen  goods.  The  35  per  cent,  ad  valorem  al- 
lowed the  manufacturer  over  and  above  the  compensa- 
tory duty  was  intended  to  cover  internal  taxes  in  an 
amount  of  lo  per  cent,  upon  his  manufactured  product 
which  had  not  been  removed,  so  that  he  received  pro- 
tection to  the  amount  of  25  per  cent.  As  a  matter  of 
fact,  however,  the  compensating  duty  was  much  too 
high  and  concealed  a  considerable  amount  of  protection 
to  the  manufacturer,  and  the  same  has  been  true  of  the 
tariffs  on  wool  ever  since.  By  one  method  and  another 
in  the  successive  tariffs  of  1883,  1890,  and  1897,  this 
ad  valorem  duty  has  been  increased,  until  finally  it  has 
reached  the  amount  of  55  per  cent.  The  compensatory 
duty  in  the  tariff  of  1867  has  been  decreased,  but  it 
still  contains  a  large  amount  of  protection  for  the 
manufacturer. 

A  little  before  1869  the  Calumet  and  Hecla  Mining 
Company  was  established.  It  owned  the  great  copper 
mines  near  Marquette  in  Michigan.  So  rich  were  these 
copper  deposits  that  the  price  of  copper  had  fallen  con- 
siderably between   1867  and   1869  and,  although  the 


28o  THE   TARIFF   AND   THE    TRUSTS 

production  was  such  that  the  mining  company  was  ex- 
porting copper  and  selling  it  in  foreign  countries,  in 
1869  it  asked  Congress  for  an  increase  of  duties.  The 
duty  before  that  time  had  been  2^  cents  a  pound  on 
imported  copper  ingots,  it  was  increased  by  the  Act  of 
1869  to  5  cents  per  pound.  President  Johnson  vetoed 
the  bill  and  both  houses  by  the  necessary  two-thirds 
vote  passed  it  over  his  veto.  In  1872  imported  copper, 
after  paying  a  duty  of  5  cents  a  pound,  could  be  sold  in 
New  York  for  24  cents  a  pound.  The  owners  of  this 
copper  mine  sold  their  copper  at  about  23^  cents,  just 
low  enough  to  keep  out  the  foreign  product.  The 
duty  on  copper  proved  so  nearly  prohibitive  that  in  the 
year  1878,  according  to  David  A.  Wells,  the  revenue 
received  by  the  government  from  the  importation  of 
copper  was  only  5  cents,  the  duty  on  one  pound.  Un- 
til 1883  when  the  duty  was  decreased  to  4  cents  a  pound 
the  owners  of  this  copper  mine  exported  their  copper 
and  sold  it  in  London  on  an  average  of  about  15  cents 
a  pound,  while  selling  the  same  copper  in  New  York 
at  about  20  cents  a  pound.  The  English  and  Con- 
tinental manufacturers  of  brass  materials,  being  able 
to  buy  their  copper  from  our  countrymen  for  about 
5  cents  a  pound  less  than  it  was  sold  in  our  own 
markets,  used  the  American  copper  in  the  manufacture 
of  brass  and  exported  it  to  our  country  nearly  ruining 
our  manufacturers  of  brass.  Finally,  American  manu- 
facturers who  wished  to  purchase  copper  cheap  enough 


OUR   TARIFF    HISTORY  28l 

to  compete  with  the  foreigner  conceived  the  idea  of 
buying  it  of  the  EngHsh  purchasers  of  American  cop- 
per. The  copper  was  shipped  to  a  purchaser  in  Eng- 
land, purchased  from  him  by  Americans,  and  returned 
at  once  in  the  original  packages  to  the  United  States, 
thus  avoiding  paying  a  duty  under  the  law.  Then  the 
mining  company  required  every  Englishman  purchasing 
their  copper  to  give  a  bond  that  he  would  not  resell 
the  copper  purchased  by  him  to  an  American.  The 
eighty  thousand  watered  shares  of  the  Calumet  and 
Hecla  Mine,  costing  about  $15  a  share,  sold  as  high  in 
those  years  as  $175  a  share  and  produced  quarterly 
dividends  of  $5  a  share,  or  133  1-3  per  cent.  This 
mining  company  recently  has  been  paying  dividends 
upon  its  $2,500,000  capital  as  follows :  1895,  60  per 
cent;  1896,  100  per  cent.;  1897,  120  per  cent.;  1898, 
160  per  cent. ;  1899,  280  per  cent. ;  1900,  320  per  cent. ; 
1901,  260  per  cent. ;  1902,  100  per  cent. ;  1903,  140  per 
cent. 

Since  the  days  when  the  Calumet  and  Hecla  Mining 
Company  were  selling  their  copper  abroad  at  about  5 
cents  a  pound  less  than  they  were  selling  it  at  home, 
hundreds  of  American  manufacturers  have  imitated 
their  example;  and  while  these  patriotic  Americans 
have  been  selling  their  highly  protected  products  to 
Europeans  for  less  than  they  would  sell  them  to  our 
own  people,  they  have  been  saying  of  those  who  op- 
posed our  outrageous  tariff :  "These  people  who  would 


282  THE    TARIFF    AND   THE    TRUSTS 

reform  the  tariff  serve  the  interests  of  Europe.  We 
support  the  interests  of  America,  Look  at  the  people 
over  there  and  think  how  much  better  off  you  are  than 
they  are.  Your  prosperity  is  the  object  of  their  envy. 
Your  institutions  the  models  of  their  imitation.  Do 
you  desire  to  compete  with  the  pauper  labor  of  Europe? 
Do  you  wish  to  let  England  manufacture  for  us  ?"  And 
the  modest  uninformed  American  citizen  votes  for  the 
protective  tariff  because  it  is  the  "American  System." 
What  irony  to  call  such  a  system  the  "American  Sys- 
tem" ! 

In  1870  Congress  imposed  a  duty  of  ij4  cents  a 
pound,  or  $28  per  gross  ton  upon  the  importation  of 
steel  rails.  The  duty  continued  at  this  amount  until 
1883.  By  1877  the  average  price  of  steel  rails  in  Eng- 
land was  only  a  little  over  $31  per  ton.  After  1877 
for  a  while  the  English  price  did  not  average  so  high 
as  $28  per  ton.  The  duty  of  $28,  therefore,  became 
equivalent  to  more  than  100  per  cent,  on  the  foreign 
price.  After  1879  for  some  years  our  manufacturers 
sold  their  steel  rails  at  $61  to  $67  per  ton,  while  the 
same  rails  could  have  been  purchased  in  England  at 
$31  to  $36  per  ton.  Congress,  knowing  the  facts, 
nevertheless  continued  a  duty  of  $17  a  ton  on  steel  rails 
by  the  Act  of  1883,  of  $13.44  per  ton  under  the  Mc- 
Kinley  Tariff,  and  to-day  of  $7.84  under  the  Dingley 
Bill,  although  there  has  not  been  a  year  since  1880 
when  steel  rails  could  not  be  manufactured  in  this 
country  as  cheaply  as  in  England. 


OUR    TARIFF    HISTORY  283 

In  1870  the  only  supply  of  marble  in  the  country  was 
in  a  single  district  in  Vermont.  Competing  marble 
came  from  Italy.  The  duty  on  marble  in  1861  was 
30  per  cent.,  in  1862  it  was  raised  to  40  per  cent.,  in 
1864  to  80  per  cent.  The  internal  revenue  taxes  on 
the  manufactures  of  marble  were  removed  in  1870. 
Notwithstanding  this  fact,  the  owners  of  the  marble 
quarries  in  Vermont  applied  to  Congress  in  that  year 
for  an  increase  of  duty,  and  specific  duties  were  im- 
posed which  were  equivalent  to  from  100  to  150  per 
cent. 

Nickel,  like  marble,  was  produced  in  one  locality  in 
the  country.  Mr.  Joseph  Wharton,  of  Philadelphia, 
was  the  owner  of  the  nickel  mine.  He  had  been  very 
industrious  in  persuading  Congress  during  the  war 
to  impose  duties  upon  the  foreign  product  which  com- 
peted with  his  nickel  and  had  secured  a  duty  of  15 
cents  by  the  Act  of  1864.  By  1870  he  had  induced 
Congress  to  increase  the  duty  to  30  cents  per  pound, 
or  about  40  per  cent,  on  the  value  of  the  nickel,  and  by 
the  aid  of  this  tariff  built  up  a  great  fortune. 

By  1872  all  the  internal  duties  which  had  any  connec- 
tion with  protective  duties  had  disappeared.  There 
was  at  this  time  in  the  United  States  Treasury  a  sur- 
plus revenue  of  $100,000,000  which  had  accrued  from 
the  tariff  after  paying  all  appropriations  and  all  interest 
on  the  public  debt.  The  Congressmen  of  those  days 
had  not  learned  so  well  as  in  our  day  how  to  reduce  a 


284  THE   TARIFF   AND   THE   TRUSTS 

surplus.  The  people  of  the  West  complained  bitterly 
of  the  burdens  of  the  tariff,  and  in  that  year  the  Ways 
and  Means  Committee  reported  a  bill  providing  for  a 
reduction  of  the  duties  upon  a  large  number  of  im- 
ports. Mr.  Dawes,  the  chairman  of  the  Committee, 
was  opposed  to  the  bill  and  so  another  member  of  the 
Committee,  Mr.  Finklenberg,  of  Missouri,  introduced 
the  measure,  saying  that  it  was  intended  merely  to 
"divest  some  industries  of  the  superabundant  protec- 
tion which  smells  of  monopoly  and  which  it  was  never 
intended  they  should  enjoy  after  the  war."  The  Con- 
stitution of  the  United  States  provides  that  bills  for 
the  raising  of  revenue  shall  originate  in  the  House  of 
Representatives.  But  of  what  matter  is  the  Constitu- 
tion when  Senators  desire  to  aid  their  friends,  the  manu- 
facturers? The  Senate,  notwithstanding  this  provi- 
sion in  the  Constitution,  seeing  that  the  popular  feeling 
would  result  in  the  passage  of  the  bill  in  the  House  of 
Representatives,  themselves,  in  conjunction  with  the 
manufacturers,  prepared  a  bill  providing  for  a  hori- 
zontal reduction  of  10  per  cent,  of  all  protective  duties. 
The  result  was  that  the  bill  originating  in  the  House 
of  Representatives  was  side-tracked  and  the  Senate 
bill  passed.  Mr.  John  L.  Hayes,  the  Secretary  of  the 
Wool  IManufacturers'  Association,  and  who  later  be- 
came President  of  the  Tariff  Commission  of  1882,  took 
charge  of  this  bill  at  Washington  for  the  Wool  Manu- 
facturers' Association,  and  after  the  desired  result  was 


OUR   TARIFF    HISTORY  28^ 

accomplished,  in  a  speech  which  he  made,  spoke  of 
"the  grand  result  of  a  tariff  bill  reducing  duties  fifty- 
three  millions  of  dollars  and  yet  leaving  the  great  in- 
dustries almost  intact.  The  present  tariff  [of  1872] 
was  made  by  our  friends  in  the  interest  of  protection. 
...  A  reduction  of  over  fifty  million  of  dollars,  and 
yet  taking  only  a  shaving  off  from  the  protection 
duties."  Mr.  Dawes,  of  Massachusetts,  the  Chairman 
of  the  Committee  on  Ways  and  Means,  was  most  active 
in  the  House  of  Representatives  in  bringing  about  this 
act  of  1872,  and  in  1875  he  drafted  a  bill  to  restore  the 
ten  per  cent.  With  little  public  attention  his  bill  was 
passed  by  both  Houses  of  Congress  and  the  country 
was  back  to  the  duty  before  1872.  The  Act  of  1872, 
however,  had  removed  the  duties  on  tea,  coffee,  wines, 
sugar,  molasses,  and  spices  and  had  gotten  rid  of 
about  every  duty  upon  imports  which  did  not  compete 
with  our  own  products.  These  were  not  restored. 
This  method  of  legislating  to  get  rid  of  duties  upon 
imports  which  did  not  come  into  competition  with  any 
home  product,  and  which  produced  revenue  only  to  the 
government  and  could  not  be  used  for  the  purpose  of 
plundenng  the  people  was  steadily  pursued  in  all  the 
tariffs  between  the  end  of  the  war  and  the  Dingley  Bill. 
In  1882  there  being  a  large  surplus  in  the  Treasury 
occasioned  by  the  collection  of  excessive  duties.  Con- 
gress passed  an  Act  for  the  appointment  of  a  tariff 
commission  which  was  to  report  at  the  next  session  of 


286  THE   TARIFF    AXD   THE    TRUSTS 

Congress  any  changes  in  the  tariff  which  it  thought 
desirable.  The  President  of  the  Commission  was  Mr. 
John  L.  Hayes,  mentioned  above,  the  Secretary  of  the 
Wool  Manufacturers'  Association.  The  majority  of 
this  committee  were  protectionists,  and  yet  so  out- 
rageously high  w^ere  the  duties  that  they  unanimously 
reported  in  favor  of  a  reduction  of  20  per  cent,  or  more. 
The  House,  having  passed  a  bill  for  the  reduction  of 
certain  internal  taxes,  the  Senate  tacked  to  this  bill 
an  amendment  reducing  the  duties,  pursuant  to  the  ad- 
vice of  the  Tariff  Commission.  But  when  the  bill 
reached  the  House,  a  curious  transaction  occurred.  A 
two-thirds  vote  under  the  then  existing  rules  was  re- 
quired to  bring  the  Senate  bill  before  the  House,  but 
such  majority  could  not  be  obtained,  although  a  ma- 
jority of  the  members  of  the  House  were  in  favor  of 
concurring  with  the  Senate.  The  protectionists  wished 
to  have  the  bill  referred  to  a  conference  committee 
where  it  could  be  amended  in  the  interests  of  their 
clients,  the  manufacturers,  and  Mr.  Reed,  of  Maine, 
was  equal  to  the  occasion.  He  moved  the  adoption  by 
the  House  of  a  new  rule  by  which  a  bare  majority  of 
the  House  could  take  up  a  bill  amended  by  the  Senate 
for  the  purpose  of  non-concurrence  in  the  Senate's 
amendments,  but  not  for  the  purpose  of  concurrence. 
This  resulted  in  the  appointment  of  a  conference  com- 
mittee to  settle  the  details  of  the  bill  and  the  tariff  act 
of  1883,  the  only  revision  up  till  that  time  of  the  tariff 


OUR    TARIFF    HISTORY  28/ 

act  of  1864,  was  settled  by  a  conference  committee,  as 
desired  by  the  protectionists  in  the  House.  Nearly 
twenty  years  had  passed  since  the  war  ended.  All  of 
the  internal  taxation  affecting  protective  duties  had 
been  repealed  as  early  as  1872.  The  people  of  the 
country  wished  the  tariff  duties  reduced,  the  tariff 
commission  composed  of  protectionists  had  reported 
in  favor  of  a  reduction  of  at  least  20  per  cent.,  the  ex- 
isting duty  had  brought  a  surplus  revenue  into  the 
treasury  of  over  $100,000,000  annually  since  1879,  and, 
notwithstanding  all  these  facts.  Congress  passed  the 
tariff  act  of  1883,  again  increasing  the  duties  on  dress 
goods  made  wholly  of  wool  and  on  the  finer  grades  of 
cloths  and  cassimeres.  A  duty  of  35  per  cent,  had 
been  imposed  in  1864  on  cotton  hosiery,  embroideries, 
trimmings,  and  laces  at  a  time  when  raw  cotton  was 
taxed  heavily.  Notwithstanding  that  the  internal  taxes 
had  been  removed,  this  rate  remained  unchanged  from 
1864  to  1883,  and  Congress  in  1883  increased  that 
duty  to  40  per  cent.  It  imposed  a  duty  of  75  cents  per 
ton  on  iron  ore,  and  increased  the  duties  on  cogged 
ingots,  rods,  piston  rods,  and  steamer  shafts.  It  in- 
creased the  ad  valorem  duties  on  the  finer  classes  of 
imported  woolens  from  35  per  cent,  to  40  per  cent.  It 
changed  the  duty  from  $7  a  ton  on  pig  iron  to  $6.72, 
and  changed  the  duty  upon  copper  from  5  cents  a 
pound  to  4  cents.  Mr.  John  L.  Hayes,  the  President 
of  the  Tariff  Commission  and  Secretary  of  the  Wool 


288  THE   TARIFF   AND   THE   TRUSTS 

Manufacturers'  Association,  expressed  his  approval  of 
the  duties  on  wool  and  woolens  in  the  new  tariff  say- 
ing: "Reduction  in  itself  was  by  no  means  desirable  to 
us;  it  was  a  concession  to  public  sentiment,  a  bending 
of  the  top  and  branches  to  the  wind  of  public  opinion 
to  save  the  trunk  of  the  protective  system.  In  a  word, 
the  object  was  protection  through  reduction;  we  were 
willing  to  concede  only  to  save  the  essentials  both  of 
the  wool  and  woolens  tariff.  .  .  .  We  wanted  the 
tariff  to  be  made  by  our  friends."  How  long  will  the 
American  people  continue  to  allow  the  tariffs  to  be 
made  by  men  in  Congress  who  are  actually  manufac- 
turers or  interested  in  corporations  which  are  receiv- 
ing great  benefits  from  the  tariff  ?  How  much  longer 
will  the  American  people  continue  to  allow  tariffs  to 
be  made  by  the  friends  of  the  manufacturers?  Is  it 
not  about  time  that  the  consumers  through  their  repre- 
sentatives have  something  to  do  wdth  the  making  of 
tariffs?  In  1884  Mr.  Morrison,  of  Illinois,  introduced 
in  the  House  of  Representatives  a  bill  providing  for  a 
general  reduction  of  tariff  duties  of  20  per  cent,  and 
the  entire  remission  of  duties  on  iron  ore,  coal,  lumber, 
and  other  articles.  The  measure  met  with  vehement 
opposition  on  the  ground  that  it  provided  for  a  hori- 
zontal reduction,  although  Congress  in  1872  had  by 
the  act  of  that  year  provided  for  just  such  a  reduction, 
and  the  enacting  clause  was  stricken  out  by  a  vote  of 
156  to  151.     Again  in  1886  he  introduced  a  new  meas- 


OUR   TARIFF    HISTORY  289 

ure  providing  for  detailed  changes  and  reductions  of 
duties  and  this  was  defeated  by  a  vote  of  157  to  140. 
In  1886  Mr.  Mills  introduced  a  bill  for  the  reduction 
of  duties  and  it  also  was  defeated,  while  in  the  same 
year  in  the  Senate  a  bill  was  prepared  but  not  passed 
increasing  the  duties. 

The  issue  in  the  campaign  of  1888  was  the  tariff,  a 
large  surplus  having  accumulated  again,  and  Air.  Har- 
rison was  elected  president,  the  vote  of  New  York  being 
decisive  of  the  issue.  Then  came  the  McKinley  Tariff 
of  1890  establishing  the  highest  duties  which  the  coun- 
try had  known  up  till  that  time.  By  that  act  the  aver- 
age ad  valorem  duty  on  dutiable  imports  was  made 
upwards  of  50  per  cent.  The  duties  were  largely  what 
are  known  as  compound  duties  consisting  of  both 
specific  and  ad  valorem  duties,  duties  which  necessa- 
rily and  invariably  tax  the  purchaser  of  the  cheaper 
grade  of  goods  much  higher  than  the  purchaser  of  the 
more  costly  grades.  Upon  hundreds  of  articles  under 
the  McKinley  Bill  specific  duties  only  by  the  pound, 
yard,  and  gallon  were  imposed.  The  duty  upon  pearl 
buttons  under  that  bill  afifords  a  good  illustration  of 
the  effect  of  such  duties.  The  specific  duty  imposed 
was  25^  cents  per  line,  and  the  ad  valorem  duty  25  per 
cent.  Certain  grades  of  buttons  were  of  low  value  and 
other  grades  were  very  costly.  The  result  was  that 
upon  the  cheapest  grades  it  was  necessary  to  pay  a 
duty  of  280  per  cent,  while  upon  the  costlier  grades 
19 


290  THE   TARIFF    AND   THE   TRUSTS 

the  duty  was  only  60  per  cent.  I  quote  from  the  re- 
port of  the  minority  of  the  committee  on  Ways  and 
Means  of  1890  as  to  the  efifect  of  such  duties  in  the 
McKinley  Bill :  "The  lowest  grades  of  woolen  yarn, 
worth  not  over  thirty  cents  per  pound,  are  to  be  sub- 
jected to  a  duty  of  112  per  cent.,  while  the  most  costly 
yarn  will  pay  72  per  cent.  One  grade  of  coarse, 
cheap  blankets  will  be  required  to  pay  106  per  cent., 
but  the  finest  blanket  will  pay  72  per  cent.  The  coars- 
est and  cheapest  woolen  hats  will  be  subject  to  a  duty 
of  III  per  cent,  and  the  finest  to  66  per  cent.  Women's 
and  children's  cheapest  dress  goods  with  cotton  warp 
are  to  be  taxed  106  per  cent.,  and  the  finest  73  per 
cent.  The  lowest  grade  of  woolen  cloth  will  pay  125 
per  cent.,  and  the  highest  grade  86  per  cent.  The 
cheapest  qualities  of  knit  goods  for  underwear  range 
from  112  to  138  per  cent.,  but  the  finest  and  most  ex- 
pensive will  pay  78  per  cent.  Woolen  shawls  of  the 
coarsest  grade  used  by  the  poorest  people  will  pay  135 
per  cent,  duty,  and  worsted  goods  of  the  lowest  grade 
will  pay  130  per  cent.,  while  the  highest  grade  will  pay 
90  per  cent."  Specific  duties  are  continued  in  the 
Dingley  Tariff.  As  further  illustrating  the  nature  of 
this  tariff,  attention  should  be  called  to  the  woolen 
schedule,  which  provides  that  if  woolen  cloth  worth 
between  30  and  40  cents  per  pound  is  imported,  the 
duty  should  be  38^  cents  per  pound,  plus  40  per  cent. 
Thus  on  goods  valued  at  between  30  and  40  cents  a 


OUR   TARIFF   HISTORY  SQI 

pound  the  compensating  duty  was  fixed  at  38^^  cents, 
a  sum  larger  than  the  whole  cost  of  the  foreign  article, 
without  considering  the  40  per  cent,  in  addition  there- 
to. Will  the  American  people  ever  see  the  outrageous 
nature  of  such  tariffs?  The  duty  on  women's  and 
children's  dress  goods  had  been  raised  in  1883  above 
the  rates  of  1867,  and  in  the  McKinley  Tariff  they  were 
raised  still  further  to  a  duty  equivalent  to  over  100  per 
cent,  on  their  foreign  value. 

Protectionists  have  steadily  misrepresented  the  na- 
ture of  the  Wilson  Tariff  passed  in  August,  1894. 
They  invariably  describe  it  as  a  free-trade  measure 
and  as  the  cause  of  the  panic  which  occurred  more  than 
a  year  before  its  passage.  Instead  of  its  being  a  free- 
trade  measure  it  was  highly  protective  in  every  fea- 
ture. The  average  ad  valorem  rate  of  duty  on  dutiable 
imports  actually  imported  under  the  Wilson  Bill  for 
the  year  ending  July  i,  1897,  was  42.17  per  cent.;  the 
average  duty  upon  dutiable  imports  under  the  tariff  of 
1883  for  the  year  ending  July  i,  1884,  was  41.60  per 
cent. ;  while  the  average  ad  valorem  rate  of  duty  for 
the  year  ending  July  i,  1864,  toward  the  end  of  the 
Civil  War,  was  36.69  per  cent.  Yet  protectionists  de- 
clare that  the  Wilson  Bill,  a  clearly  protectionist  meas- 
ure, instituted  a  period  of  free  trade.  The  Wilson 
Bill  removed  the  duty  on  wool,  thus  making  a  compen- 
sating duty  to  the  manufacturer  unnecessary,  but  it  left 
the  ad  valorem  duty  of  50  per  cent.     The  manufactur- 


292  THE   TARIFF   AND   THE   TRUSTS 

ers  complained  of  this,  and  their  complaint  is  very 
good  evidence  that  the  compensating  duty  in  the  prior 
tariffs  had  been  higher  than  was  necessary  to  off-set 
the  duty  upon  wool.  It  changed  the  specific  duty  on 
raw  sugar  to  an  ad  valorem  duty  of  40  per  cent.,  and 
left  the  duty  of  one-eighth  of  one  per  cent,  on  refined 
sugar  imposed  by  the  McKinley  Bill,  adding  thereto 
a  duty  of  one-tenth  of  a  cent  per  pound  on  refined 
sugar  coming  from  countries  that  gave  an  export 
bounty.  In  the  discussion  which  occurred  over  the 
sugar  duty  Senator  Aldrich,  Republican  Senator  from 
Rhode  Island,  said :  "Certain  persons  not  known  to  the 
Constitution,  or  the  laws,  not  recognized  as  any  part 
of  the  national  government,  have  demanded  that  cer- 
tain provisions  [referring  to  the  sugar  schedule]  shall 
be  written  in  the  statutes  of  the  United  States  and  the 
members  of  a  great  party  cravenly  submit  to  these  de- 
mands." At  the  time  of  the  passage  of  the  bill  sugar 
stock  rose  in  a  day  or  two  from  gsJ4  to  106^.  Three 
years  pass,  and  Senator  Aldrich,  no  longer  indignant 
at  dictation  from  the  sugar  trust,  with  his  associates 
"cravenly"  enacts  a  new  sugar  tariff  dictated  by  the 
same  trust  and  sugar  stock  goes  up  with  a  bound  from 
no  to  146,  putting  $13,000,000  into  the  pockets  of  the 
stockholder.  An  investigation  was  instituted  to  ex- 
amine the  charges  that  improper  means  had  been  used 
by  the  American  Sugar  Company  to  bring  about  the 
passage  of  the  provision  as  to  the  duty  upon  refined 


OUR   TARIFF    HISTORY  293 

sugar  in  the  Wilson  Bill,  and  upon  that  investigation 
Mr.  Havemeyer  testified  as  follows:  "The  sugar  trust 
makes  it  a  rule  to  make  political  contributions  to  the 
Republican  party  in  Republican  states  and  to  the 
Democratic  party  in  Democratic  states.  .  .  .  We  get 
a  good  deal  of  protection  from  our  contributions.  .  .  . 
Our  company  has  made  considerable  money  out  of  the 
McKinley  Bill."  Can  the  consumer  be  secured  justice 
when  the  trust  controls  a  considerable  number  of 
Senators  in  both  parties?  There  is  no  reasonable 
doubt  that  the  provisions  of  the  Wilson  Bill  as  to  the 
duties  on  sugar,  and  of  the  Dingley  Bill  as  well,  were 
the  result  to  some  extent  of  improper  influences.  The 
duties  on  wire  nails  in  the  Wilson  Bill  were  high 
enough,  so  that  the  makers  of  wire  nails  could  frame 
a  pool  on  May  i,  1895,  and  raise  the  base  price  of  wire 
nails  from  $.85  on  that  day  to  $3.05  a  little  over  a  year 
later.  The  duties  in  the  Wilson  Bill  were  high  enough 
on  steel  ingots  and  steel  rods,  so  that  between  April 
and  September,  1895,  steel  billets  rose  60  per  cent. 
Surely  the  men  representing  the  Democratic  party  in 
the  United  States  Senate  in  1894  sorely  abused  the 
confidence  which  voters  had  placed  in  that  party,  and 
the  Wilson  Bill  which  they  passed,  instead  of  being  a 
free  trade  measure,  was  but  little  better  than  the  Mc- 
Kinley Bill  which  it  superseded.  It  was  repealed 
within  a  period  of  about  two  and  a  half  years,  and 
surely  a  sufficient  time  had  not  passed  to  determine 


294  THE   TARIFF   AND   THE    TRUSTS 

whether  or  no  it  was  an  improvement  over  the  Mc- 
Kinley  Bill. 

The  panic  of  1893  and  the  subsequent  depression 
dearly  came  from  causes  existing  at  the  time  Mr. 
Cleveland  became  president.  At  the  end  of  his  first 
administration  the  National  Treasury  was  overflowing 
with  money,  but  the  first  Congress  of  Mr.  Harrison's 
administration  cut  off  $50,000,000  of  the  public  in- 
come by  the  passage  of  the  McKinley  Bill,  imposing 
duties  so  high  as  to  keep  foreign  imports  out  of  the 
country.  The  same  Congress  added  $50,000,000  to 
the  ordinary  expenditures  of  government.  It  borrowed 
$50,000,000  of  the  national  banks  by  turning  the  re- 
demption fund  into  the  treasury,  and  it  added  over 
$150,000,000  to  the  legal-tender  currency  of  the  country 
redeemable  in  gold,  while  it  diverted  an  equal  amount 
of  the  public  revenue  to  the  purchase  of  pig  silver  at 
much  more  than  its  real  value,  to  be  stacked  in  the 
treasury  vaults.  For  several  months  before  the  4th 
day  of  March,  1893,  Mr.  Foster,  Secretary  of  the 
Treasury,  was  represented  in  the  public  newspapers  as 
contemplating  the  immediate  issue  of  bonds  to  be  sold 
to  raise  funds  to  supply  the  deficiency,  but  by  hook  or 
crook  this  was  tided  over  until  the  4th  day  of  March, 
1893,  when  he  turned  over  the  Treasury,  practically 
bankrupt,  to  the  new  administration,  and  the  financial 
crisis  was  already  at  hand.  A  shortage  of  crops  in  our 
own  country,  the  low  price  of  wheat  prevailing  here, 


OUR   TARIFF    HISTORY  295 

together  with  large  crops  in  the  countries  of  our  com- 
petitors and  the  general  depression  then  prevailing 
throughout  European  countries,  together  with  the 
other  above  stated  causes,  easily  accounts  for  the  finan- 
cial depression  of  1893  and  1894. 

If  the  history  given  here  does  not  show  that  the  ex- 
isting tariff  is  protection  gone  mad,  then  I  know  not 
the  inferences  to  be  drawn  from  facts.  The  War 
Tariff  was  imposed  with  a  distinct  understanding  that 
it  was  to  be  removed  when  the  internal  duties  upon 
manufactured  products  and  manufacturers  were  re- 
pealed. All  the  statements  made  by  Congressmen  at 
that  time  tend  to  show  this.  When  the  war  was  over 
and  the  internal  duties  had  been  removed,  the  people 
had  the  right  to  have  the  burdens  of  protection  also 
taken  oflf,  but  scattered  over  our  entire  territory  they 
were  weak  compared  with  the  few  hundreds  or  thou- 
sands of  manufacturers  who  had  access  to  Congress- 
men. The  people,  absorbed  in  their  daily  tasks,  are 
unable  to  follow  the  details  of  so  complicated  a  ques- 
tion as  the  tariff,  and  they  relied,  and  had  a  right  to 
rely,  upon  their  Representatives  in  Congress  to  care 
for  their  interests.  Members  of  the  House  and  of  the 
Senate  have  been  recreant  to  their  duty  to  the  people 
in  allowing  the  Tariff  of  1864  not  only  to  continue, 
but  to  have  its  duties  in  many  cases  almost  doubled. 
There  is  no  justification  of  our  existing  tariff.  Every 
intelligent  man  knows  this,  and  yet  so  weak  is  the 


296  THE    TARIFF    AND   THE    TRUSTS 

public  spirit  of  this  country,  and  so  strong  are  special 
interests  that  this  terrible  injustice  continues.  The 
average  ad  valorem  duties  upon  dutiable  imports,  to 
which  I  have  referred  so  frequently  in  this  chapter,  do 
not  correctly  describe  the  real  condition  of  the  tariff. 
The  specific  duties  found  in  the  Dingley  Bill  hide  from 
public  view  the  real  power  of  prohibiting  the  importa- 
tion of  foreign  imports.  The  importation  of  the  lower 
grades  and  values  of  hundreds  of  commodities  is  actu- 
ally prohibited  by  these  specific  duties.  The  result  is 
that  upon  the  coarser  and  cheaper  grades  of  its  manu- 
factured articles  the  trust  can  increase  the  price  ex- 
torted from  the  poor  in  many  cases  a  hundred  per 
cent.  Since  the  Tariff  of  1864  the  average  of  the  com- 
bined ad  valorem  and  specific  duties  upon  dutiable  im- 
ports has  been  higher  under  the  various  acts  passed 
by  Congress  than  those  imposed  during  the  same  period 
by  any  other  country  in  the  world.  The  existing 
Russian  duty  apparently  is  higher  than  ours,  but  we 
are  actually  collecting,  and  have  been  collecting  for 
nearly  forty  years,  the  highest  duties  on  dutiable  im- 
ports of  any  country  in  the  world. 


CHAPTER  IX 

HOW    ENGLAND   GOT    FREE    TRADE 

There  is  no  history  in  the  world  more  interesting 
than  the  struggle  of  Englishmen  for  industrial  free- 
dom. The  conditions  existing  for  centuries  before  the 
agitation  for  the  repeal  of  the  Corn  Laws  bore  with 
great  severity  upon  the  people.  From  the  twelfth  to 
the  fifteenth  century  the  local  trade  of  towns  was  regu- 
lated by  the  merchant  and  craft  guilds,  the  manufacture 
of  cloth  being  restricted  to  certain  towns  and  a  monop- 
oly given  to  their  guilds.  A  statute  of  Edward  III 
enumerates  ten  staple  towns  in  England  that  paid  for 
the  monopoly  they  enjoyed  and  gives  the  customs 
duties  payable  on  the  goods  sold  there.  During  the 
reign  of  the  same  monarch  a  statute  was  passed  regu- 
lating the  clothing  of  the  people  and  describing  what 
apparel  might  or  might  not  be  worn  by  the  different 
classes.  In  the  reign  of  Edward  VI  certain  saddlers 
of  England  were  given  a  monopoly  of  trade  in  leather, 
which  continued  until  the  cobblers  petitioned  Parlia- 
ment against  it.  Parliament  then  abolished  the 
monopoly,  saying,  "Since  the  making  of  the  statute 
all  kinds  of  leather  are  more  slenderly  and  deceitfully 

297 


298  THE    TARIFF    AND   THE   TRUSTS 

wrought  and  made  than  ever  before,  but  nevertheless 
dear  or  dearer."  In  the  reign  of  EHzabeth  it  was  a 
capital  offence  for  a  man  a  second  time  to  export  wool 
or  English  rams.  In  the  reign  of  Charles  II,  for  the 
protection  of  the  makers  of  woolen  cloth,  an  act  was 
passed  requiring  that  every  dead  body  should  be  buried 
in  a  woolen  shroud.  The  people,  however,  did  not  die 
fast  enough  to  suit  the  weavers,  and  so  in  the  reign  of 
George  I  Parliament  enacted,  for  the  encouragement 
of  the  woolen  and  silk  trades,  that  a  person  wearing  a 
garment  of  calico  should  be  subjected  to  a  fine  of  £5, 
and  any  person  selling  it  should  be  liable  to  a  fine  of 
i20.  Under  Elizabeth  not  only  were  monopolies 
granted  to  her  courtiers  to  sell  the  necessaries  of  life, 
but  the  exclusive  rights  of  trading  in  different  parts  of 
the  world  were  granted.  The  Russia  Company  formed 
in  1553,  the  Baltic  Company  in  1579,  the  Levant  Com- 
pany in  1 58 1,  the  Guinea  Company  in  1588,  and  the 
East  India  Company  in  1600,  were  some  of  these  com- 
panies. In  a  pamphlet  published  in  1664  by  Thomas 
Mun,  called  "England's  Treasure  by  Foreign  Trade," 
the  mercantilist  theory  of  trading  which  prevailed  in 
that  day  is  explained  "to  consist  in  keeping  imports  less 
than  exports,  thus  to  secure  a  favorable  balance,  and 
provide  an  abundance  of  money  which  could  be  drawn 
upon  in  time  of  need."  This  is  the  theory  of  our  en- 
lightened protectionists  to-day.  Not  only  were  there 
duties  upon  imports,  but  also  upon  exports  of  many 


HOW    ENGLAND   GOT    FREE   TRADE  299 

commodities  like  coal,  timber,  wool  and  others.  Sir 
Robert  Walpole,  as  Prime  Minister  in  the  reign  of 
George  I,  advised  the  removal  of  export  duties,  and 
pursuant  to  his  advice  they  were  taken  off  of  more 
than  a  hundred  articles  of  British  manufacture,  while 
forty  articles  of  raw  material  were  allowed  to  be  im- 
ported without  duty.  William  Pitt,  the  great  Prime 
Minister,  had  a  strong  leaning  toward  free  trade.  He 
entered  upon  a  course  of  economic  reforms  by  a  com- 
mercial treaty  with  France  in  1786,  but  the  war  of  1793 
with  France  brought  not  only  his  reforms  to  an  end, 
but  produced  conditions  which  renewed  and  intensified 
the  protective  policy.  At  the  end  of  the  eighteenth 
century  there  were  1550  articles  on  the  English  customs 
tariff  and  2,090  on  the  Irish.  The  customs  laws  of 
England  made  six  heavy  folio  volumes.  All  duties 
were  heavy  and  many  were  prohibitory.  Between 
1797  and  181 5  six  hundred  separate  acts  affecting 
duties  were  passed.  In  the  early  part  of  the  nineteenth 
century  a  series  of  conspiracy  acts  were  passed  pro- 
hibiting combinations  and  preventing  workmen  from 
selling  their  labor  by  collective  bargaining.  It  was  a 
crime  at  that  time  in  England  for  a  laboring  man  to 
belong  to  a  labor  union.  What  was  known  as  the  z\ct 
of  Settlement  interfered  with  the  free  movement  of 
labor  in  search  of  employment  and  kept  the  laboring 
man  in  the  parish  where  he  was  born. 

During  the  Napoleonic  Wars  Great  Britain  sought 


30O  THE    TARIFF   AND   THE    TRUSTS 

to  cut  off  the  trade  between  France  and  her  colonies, 
and  France  endeavored  to  exclude  from  the  Continent 
the  importation  of  British  goods.  The  decrees  of 
Napoleon  and  the  British  Orders  in  Council  destroyed 
trade  between  the  countries,  except  such  as  was  car- 
ried on  by  smuggling.  At  the  close  of  the  Napoleonic 
War  in  1815  Great  Britain  found  herself  with  a  debt 
of  i86o,ooo,ooo  and  taxation  (which  was  £17,000,000 
annually  before  the  war)  amounting  to  £72,000,000 
annually  for  a  population  numbering  less  than  twenty 
million  people.  Notwithstanding  the  great  necessities 
for  revenue,  the  income  tax  prevailing  during  the  war 
and  at  the  time  of  its  close  was  repealed,  and  the  coun- 
try commenced  imposing  duties  upon  all  imports  and 
especially  upon  corn.  Half  the  foreign  goods  brought 
into  England  from  France  were  smuggled.  In  1842 
Sir  Robert  Peel,  in  the  discussion  over  his  bill  to  re- 
duce duties,  read  a  circular  in  the  House  of  Commons 
in  which  lace,  gloves,  and  other  French  goods  were 
offered  to  a  London  firm  at  rates  "considerably  below 
your  custom  house  duties."  By  1820  the  burdens  of 
the  protective  tariff  had  become  so  grievous  that  peti- 
tion after  petition  came  from  different  parts  of  Great 
Britain  to  the  House  of  Commons  complaining  of  the 
injustice  of  the  restrictive  system  and  asking  for  free- 
dom of  trade  except  so  far  as  duties  were  necessary  for 
revenue.  The  answer  of  government  was,  "The  diffi- 
culty of  the  reform  of  taxation  is  the  vested  interests 


HOW   ENGLAND   GOT   FREE   TRADE  30I 

which  have  grown  up  and  which  would  be  imperiled 
if  any  attempt  were  made  at  such  a  design."  About 
1824  or  1825  Mr.  Huskinson,  President  of  the  Board 
of  Trade,  carried  on  a  series  of  financial  reforms  for 
about  four  years  reducing  the  tariff  restrictions  upon 
many  imports.  He  endeavored  especially  to  reduce  the 
duties  on  raw  materials  and  succeeded  in  lowering 
many.  Mr.  Huskinson's  opinion  of  the  protective  sys- 
tem is  found  in  these  words :  "We  are  far  behind  other 
nations  in  this  industry  [manufacturing  of  silk]  ; 
it  [protection]  has  a  chilling  and  benumbing  effect 
and  men  are  rendered  indifferent  to  exertion  by  the  se- 
curity of  a  prohibitory  system."  The  most  oppressive 
of  all  the  protective  duties  were  the  Corn  Laws,  a  gen- 
eral description  for  duties  upon  the  importation  of 
grain.  In  1824  foreign  wheat  was  prohibited  from 
entering  the  Kingdom  until  the  current  price  was  equal 
to  70s.  a  quarter  of  a  ton's  weight,  or  8  bushels.  When 
the  price  reached  85s.  a  quarter,  the  duty  was  reduced 
to  its  lowest,  which  was  5s.  2d.  per  quarter.  Under 
such  protection  wheat  rose  at  times  as  high  as  112s. 
per  quarter.  Terrible  distress  prevailed  between  1820 
and  1832,  but  there  was  no  relief  for  the  people  in  Par- 
liament. The  members  of  the  House  of  Lords  were 
the  great  landowners  of  England,  and  they  regarded 
high  prices  as  beneficial  to  their  interests.  A  consid- 
erable proportion  of  the  members  of  the  House  of  Com- 
mons represented  what  were  known  as  rotten  boroughs, 


302  THE    TARIFF   AND   THE   TRUSTS 

owned  by  members  of  the  House  of  Lords.  The  Duke 
of  Norfolk  owned  or  controlled  eleven  members  in 
the  House  of  Commons,  men  representing  boroughs 
in  his  domain.  Lord  Lonsdale  controlled  nine,  Lord 
Darlington  seven,  the  Duke  of  Rutland,  the  Marquis 
of  Buckingham  and  Lord  Carrington  six  each.  In 
this  way  the  House  of  Lords  was  all-powerful  in  con- 
trol of  the  Commons.  While  many  of  these  boroughs 
had  only  a  few  voters,  and  one  of  them  but  a  single 
elector,  the  great  cities  of  Birmingham,  Manchester, 
Glasgow,  and  Bath  were  inadequately  represented. 
The  Reform  Bill  in  1832  swept  away  this  abuse,  ex- 
tended the  franchise  very  widely  and  gave  the  great 
cities  representation  in  the  House  of  Commons.  It 
was  the  Reform  Act  of  1832  that  rendered  the  repeal 
of  the  Corn  Laws  possible.  Although  duties  were  im- 
posed upon  thousands  of  imported  commodities,  the 
most  were  so  high  as  to  be  prohibitive,  and  the  revenue 
received  from  the  customs  amounting  to  £23,000,000 
was  nearly  all  collected  on  about  twenty  commodities. 
Such  was  the  condition  of  England  when  the  move- 
ment which  we  are  now  to  describe  commenced. 

In  1837  King  William  IV  died,  and  Victoria  became 
Queen  of  England.  The  conditions  of  the  laboring 
people  both  in  the  manufacturing  and  agricultural  in- 
dustries in  England  at  that  time  were  so  terrible  that 
the  truth  would  seem  an  exaggeration.  In  a  land  pos- 
sessing the  greatest  wealth  existing  at  that  time  and 


HOW    ENGLAND    GOT    FREE    TRADE  3O3 

loaning  money  in  industrial  undertakings  all  over  the 
world,  the  laboring  men  in  manufacturing  and  agricul- 
ture were  actually  starving,  and  they  were  starving  be- 
cause the  law  practically  prohibited  the  importation  of 
food  and  the  home  supply  was  insufficient.  Early  in 
1837  an  Anti-Corn  Law  Association  was  started  in  Lon- 
don, consisting  of  seventy-four  members,  but  it  seems 
to  have  taken  no  further  action.  In  February  of  that 
year  Mr.  Richard  Cobden  attempted  to  induce  the 
Manchester  Chamber  of  Commerce  to  take  up  the  sub- 
ject of  the  repeal  of  the  Corn  Laws,  but  without  suc- 
cess. In  March,  1838,  Mr.  Charles  P.  Villiers,  a 
brother  of  the  Earl  of  Clarendon  and  Member  from 
Wolverhampton,  then  a  young  man,  brought  forward 
in  the  House  of  Commons  a  motion  to  inquire  into  the 
operation  of  the  Corn  Laws,  and  repeated  it  each  year 
thereafter  until  their  repeal.  In  answer  to  a  petition 
in  that  year  for  a  repeal  of  the  Corn  Laws,  Lord  Mel- 
bourne, the  Whig  Prime  Minister,  replied,  "that  the 
government  would  not  move  until  they  were  assured  a 
majority  of  the  people  were  in  favor  of  a  change." 
That  is  the  reply  of  the  protectionists  in  our  Congress 
to-day — "We  will  stand  pat  until  the  people  direct  us 
to  act."  And  that  will  always  be  the  attitude  of  Con- 
gress until  the  people  throw  up  party  allegiance  and 
carry  on  the  battle  outside  of  party  lines.  The  strug- 
gle in  England,  however,  had  been  commenced  by  men 
who  knew  how  to  deal  blows  effectively  and  to  gather 


304  THE   TARIFF    AND   THE    TRUSTS 

millions  of  voters  behind  them  in  spite  of  party  lines. 
In  September,  1838,  Doctor  Bowring,  an  enthusiastic 
advocate  of  free  trade,  lectured  in  Manchester  to  about 
sixty  people  who  were  opposed  to  the  Corn  Law.  He 
advanced  with  great  force  the  argument  that  the  de- 
pression in  manufacturing  in  England  resulted  from 
shutting  out  the  imports  of  corn  and  so  shutting  in 
their  cotton,  woolens,  silk  and  other  manufactured 
goods.  "In  France,"  he  said  "there  are  millions  wil- 
ling to  clothe  themselves  in  English  garments  and 
you  have  millions  of  hungry  mouths  to  take  their  corn. 
In  Hungary,  not  being  able  to  sell  their  corn,  the  peo- 
ple are  turning  their  capital  to  manufacturing  their 
own  cloth.  Universal  trade  is  the  means  of  prevent- 
ing war,  for  who  quarrels  with  his  benefactors,  with 
those  who  confer  benefits  and  blessings?"  To  this 
meeting  the  Anti-Corn  Law  League  owes  its  origin. 
Seven  enthusiastic  men  met  on  the  24th  of  the  same 
month  and  decided  to  form  the  association.  On  the 
13th  of  October  a  committee  of  thirty-eight  members 
was  advertised,  including  the  names  of  many  who  were 
afterwards  prominent  speakers  in  the  agitation,  among 
them  being  the  names  of  Richard  Cobden  and  John 
Bright.  At  the  request  of  this  Anti-Corn  Law  Associa- 
tion the  Manchester  Chamber  of  Commerce  called  a 
m.eeting  and  adopted  a  resolution  drafted  by  Mr. 
Cobden  demanding  "the  repeal  of  all  laws  relating  to 
the  importation  of  foreign  corn  and  other  foreign  arti- 


HOW    ENGLAND   GOT    FREE   TRADE  3O5 

cles  of  subsistence  and  the  removal  of  all  obstacles  to 
the  unrestricted  employment  of  industry  and  capital." 
Richard  Cobden,  the  leader  of  the  contest  from  now 
on,  was  one  of  eleven  children,  the  son  of  a  small 
struggling  farmer  in  Sussex.  At  the  expense  of  a 
relative  he  attended  a  small  Yorkshire  school  for  five 
years  and  then  entered  the  office  of  his  uncle,  a  cotton 
merchant  in  London.  At  twenty-one  he  was  a  com- 
mercial traveler  selling  cotton  goods.  All  the  spare 
hours  in  his  work  for  his  uncle  and  upon  the  road  were 
given  to  the  study  of  the  French  language,  of  English 
history,  literature  and  political  economy.  After  a  few 
years'  experience  as  a  commercial  traveler,  he,  with  two 
other  young  men,  started  business  as  commission 
agents  in  cotton  goods.  They  afterwards  became  cot- 
ton printers,  and  Mr.  Cobden  accumulated  some  money 
in  this  business.  Then  his  thirst  for  knowledge  caused 
him  to  travel  widely  through  France,  Switzerland,  the 
United  States,  Eastern  Europe,  and  Asia  Minor.  He 
closely  observed  and  studied  the  institutions  of  all  the 
countries  he  visited.  When  in  the  United  States  he 
made  some  small  investments  in  the  industries  of  that 
day,  especially  becoming  interested  in  the  Illinois 
Central  Railway.  He  was  a  great  admirer  of  our  in- 
stitutions, and  Richard  Cobden  and  John  Bright  were 
the  firm  friends  and  advocates  of  the  Northern  cause 
during  the  Civil  War.  One  would  hardly  expect  from 
such  a  training  exact  and  critical  knowledge  of  history 


306  THE    TARIFF   AND   THE   TRUSTS 

and  political  economy,  yet  it  is  the  testimony  of  about 
all  the  great  men  with  whom  he  came  in  contact  that 
Mr.  Cobden  was  equipped  with  the  most  exact  and 
thorough  knowledge  in  economic  subjects  and  practical 
affairs  of  any  man  of  his  time.  In  addition  to  his 
mastery  of  facts,  he  had  the  rare  gift  of  clear,  terse, 
straightforward  statement. 

A  considerable  proportion  of  the  members  of  the 
Anti-Corn  Law  Association  were  manufacturers. 
England  had  availed  herself  from  the  middle  of  the 
eighteenth  century  of  the  inventions  in  spinning  and 
weaving  of  Wyatt,  Hargreaves,  Arkwright,  Crompton, 
and  Cartwright,  and  these  industries,  together  with 
others,  had  reached  a  point  where  England  depended 
upon  foreign  markets  for  the  sale  of  a  large  surplus  of 
her  manufactures.  The  Corn  Laws  and  the  other 
duties  shut  out  imports,  and  the  manufacturers  came 
to  see  that  whatever  shut  out  imports  shut  in  their 
product.  Moreover,  the  Corn  Laws  had  made  food 
so  scarce  and  so  high  that  the  laboring  men  could  not 
live  upon  their  daily  wages,  and  the  result  was  that  a 
large  proportion  of  the  manufacturers  in  England  were 
opposed  to  the  Corn  Laws.  Their  position  was  that 
the  tax  on  imports  had  practically  closed  the  foreign 
markets  to  their  commodities  which  the  foreigners  were 
willing  to  take  in  exchange  for  corn  and  wheat.  They 
maintained  that  the  government  by  its  system  of  pro- 
tection had  brought  about  a  like  system  on  the  part  of 


HOW    ENGLAND   GOT    FREE    TRADE  3O7 

the  United  States  and  Prussia  and  Russia,  and  as  a  re- 
sult they  had  to  pay  duties  to  get  their  exports  into 
these  countries,  then  exchange  them  for  the  foreign 
export,  and  finally  lose  any  profit  by  paying  an  import 
duty  on  the  exchange  product  into  England.  Undoubt- 
edly considerations  of  this  kind  were  powerful  in  bring- 
ing about  the  organization  of  the  /\nti-Corn  Law  Asso- 
ciation, but  this  class  interest  of  the  manufacturers  as 
the  battle  went  on  broadened  out  into  patriotism. 

In  February,  1839,  deputies  of  the  Anti-Corn  Law 
Association  appeared  in  the  House  of  Commons  and 
asked  through  Mr.  Villiers  that  they  be  allowed  to  offer 
evidence  and  present  a  petition  at  the  bar  of  the  House 
of  Commons.  This  was  about  the  time  when  John 
Quincy  Adams  in  our  own  country  was  attempting 
to  present  petitions  against  slavery,  and  Adams  and 
the  Anti-Corn  Law  Association  both  found  that  their 
petitions  were  presented  to  those  who  were  pecuniarily 
interested  in  maintaining  the  institution  which  they  as- 
sailed. The  answer  of  Lord  Melbourne,  the  Prime 
Minister  of  the  Whig  Party,  to  the  petition  was  that 
to  abolish  protection  of  agriculture  ''was  the  wildest 
and  maddest  scheme  ever  entered  into  the  imagination 
of  man  to  conceive."  In  March  of  the  same  year  the 
voluntary  association  called  the  Anti-Corn  Law  As- 
sociation was  superseded  by  an  incorporated  body 
known  as  the  Anti-Corn  Law  League,  its  object  being 
to  continue  the  agitation  against  the  Corn  Laws  until 


308  THE    TARIFF   AND    THE    TRUSTS 

they  were  repealed.  The  new  League  commenced 
raising  money,  employing  lecturers,  printing  and  cir- 
culating pamphlets,  and  instructing  and  organizing 
the  country  against  the  Corn  Laws.  They  continued 
this  for  seven  years  until  they  had  convinced  the  peo- 
ple, the  leaders  of  both  the  W'hig  and  the  Conservative 
party,  the  Queen,  and  a  large  majority  of  the  members 
of  the  House  of  Commons  and  of  the  Lords  that  the 
Corn  Laws  and  the  whole  protective  system  ought  to 
be  repealed.  The  discussion  of  the  Reform  Bill  and 
the  enfranchisement  of  the  large  body  of  voters  had 
stimulated  the  mental  faculties  of  men  and  aroused  in 
them  a  craving  thirst  for  knowledge,  and  to  these  men 
newly  franchised  the  speakers  of  the  League  went  out. 
They  battled  side  by  side  with  another  body  of  men 
known  as  the  Chartists.  The  Chartists  were  a  demo-r 
cratic  and  to  some  extent  a  revolutionary  body  seeking 
a  radical  change  in  the  political  constitution  of  Eng- 
land and  their  demands  were: 

First.     Universal  suffrage. 

Second.     Vote  by  ballot. 

Third.     Annual  Parliaments. 

Fourth.     Equal  electoral  districts. 

Fifth.     No  property   qualification    for  members  of 
Parliament. 

Sixth.     Payment  of  members. 
The  Chartists,  numbering  hundreds  of  thousands  of 
laboring  men,  steadily  battled  against  the  Anti-Corn 


HOW    ENGLAND   GOT    FREE    TRADE  3O9 

Law  League  and  frequently  broke  up  its  meetings. 
The  leaders  of  the  Chartist  movement  instructed  their 
audiences  that  high  prices  of  food  insured  high  wages, 
just  as  the  protectionist  in  our  day  argues  to  the  labor- 
ing men  that  high  prices  of  the  necessaries  of  life  in- 
sure high  wages. 

A  paper  called  the  Anti-Corn  Law  Circular  was 
started  to  spread  the  teachings  of  the  League  and  at- 
tained a  wide  circulation.  The  largest  number  of 
members  of  the  League  came  from  Manchester,  and 
there,  in  the  early  stages  of  the  movement,  the  greatest 
interest  appeared.  Mr.  Cobden  was  the  owner  of  the 
spot  where  the  great  mass  meeting  was  held  in  1819 
and  where  the  Peterloo  massacre  occurred,  and  he 
gave  it  to  the  League  as  a  site  for  a  building,  and  there, 
in  1843,  arose  the  famous  Free  Trade  Hall. 

In  May,  1840,  Mr,  Joseph  Hume,  in  the  House  of 
Commons  succeeded  in  obtaining  the  appointment  of 
a  committee  to  inquire  "into  the  several  duties  levied 
upon  imports  and  how  far  those  duties  were  for 
revenue  only  or  for  protection."  The  examination  of 
this  committee  brought  to  public  attention  the  dif- 
ference between  taxation  for  revenue  and  taxation 
for  protection,  and  it  appeared  that  the  greater  part 
of  the  duties  were  either  prohibitive  in  their  nature 
or  restricted  importations  to  such  an  extent  as  to 
aflford  little  or  no  revenue.  In  1841  the  League  com- 
menced   sending   out    lecturers.     Party   politics    were 


310  THE   TARIFF    AND   THE    TRUSTS 

entirely  discarded,  and  the  members  of  the  League 
devoted  themselves  exclusively  to  the  question  of 
the  removal  of  the  tax  on  bread.  Neither  political 
party  gave  them  any  countenance.  The  Tories  were 
firm  in  their  support  of  protection  and  the  sliding 
scale  of  duty  on  corn,  and  the  Whigs  who  were  in 
office  at  the  time  professed  to  advocate  a  moderate 
fixed  duty  upon  corn.  Upon  the  report  of  the  Import 
Duties  Committee  referred  to  above  Lord  John  Russell, 
the  leader  of  the  Whig  party,  seeing  the  popularity  of 
the  agitation  of  the  Anti-Corn  Law  League,  proposed 
in  his  budget  for  1841  to  replace  the  sliding  scale  by 
a  fixed  duty  of  8s,  per  quarter  on  wheat,  4s.  6d.  per 
quarter  on  barley,  and  3s.  6d.  on  oats,  and  to  modify 
the  duties  upon  sugar  and  timber.  The  issue  with  the 
Tory  party  having  been  joined  over  this  proposal,  the 
Whigs  were  defeated,  and  Sir  Robert  Peel,  the  leader 
of  the  Tory  party,  proposed  a  vote  of  want  of  confi- 
dence which  was  carried  in  the  House  of  Commons  by 
a  majority  of  only  one,  and  the  government  appealed 
to  the  country.  In  that  election  the  Anti-Corn  Law 
League  in  some  districts  nominated  candidates  who 
were  free  traders ;  in  other  districts  where  they  had 
followers  they  supported  the  Whig  candidates.  Sev- 
eral members  in  favor  of  the  repeal  of  the  Corn  Laws, 
among  them  Mr.  Cobden,  were  elected,  but  the  Tories 
succeeded  in  carrying  the  country,  and  came  into  office 
with  a  majority  of  nearly  a  hundred  votes. 


HOW    ENGLAND   GOT   FREE   TRADE  3II 

From  the  commencement  of  the  administration  of 
Sir  Robert  Peel  in  September,  1841,  the  struggle  which 
resulted  in  bringing  free  trade  to  England  becomes 
intense,  and  it  is  of  great  importance  that  the  reader 
shall  see  clearly  the  parties  in  that  struggle  and  their 
attitude  toward  each  other.  Sir  Robert  Peel  was  him- 
self a  man  of  aristocratic  tendencies  and  of  great 
wealth,  but  possessed  a  clear  and  logical  mind  and  gen- 
erous feelings.  He  was  the  leader  of  the  Conservative 
Party  the  members  of  which  were  personally  interested 
as  landowners  in  the  continuance  of  the  Corn  Laws. 
The  Whig  party  was  also  a  protectionist  party,  led  by 
Sir  John  Russell ;  but  at  the  commencement  of  the  ad- 
ministration of  Sir  Robert  Peel  they  attempted  to  unite 
with  the  free  traders  to  embarrass  his  administration. 
Mr.  Cobden  and  his  followers  refused  to  make  any  al- 
liance with  either  party,  and  in  his  first  speech  he  de- 
clared :  "I  call  myself  neither  Whig  nor  Tory,  I  am  a 
free  trader,"  and  under  this  banner,  and  pursuing  this 
policy,  he  fought  until  the  battle  was  won.  So  the 
reader  will  see  that  both  parties  were  hostile  to  the  re- 
peal of  the  Corn  Laws  and  that  the  battle  could  be  won 
only  by  convincing  the  people  that  the  Corn  Laws  were 
a  cruel  injustice  and  ought  to  be  repealed.  It  was 
different,  however,  with  the  duties  on  manufactured 
products.  The  large  body  of  the  manufacturers  had 
come  to  believe  that  these  duties  were  a  hindrance  rath- 
er than  an  aid  to  them,  although  there  were  many  who 


312  THE    TARIFF    AND   THE   TRUSTS 

desired  protection  for  their  particular  branch  of  manu- 
facture ;  and  while  a  large  majority  of  members  of  the 
House  of  Commons  from  both  parties  and  the  almost 
united  interest  of  the  Lords  were  supporting  the  Corn 
Laws,  there  was  no  organized  opposition  to  the  repeal 
of  duties  upon  manufactured  products.  Sir  Robert 
Peel,  in  the  fall  of  1841,  as  his  action  afterwards  tended 
to  show,  probably  had  come  to  believe  that  the  whole 
protective  system  was  wrong.  But  practically  all  of 
the  members  of  the  Conservative  party  in  the  House 
of  Commons  of  which  he  was  leader  were  opposed  to 
the  repeal  of  the  Corn  Laws,  and  so  he  proceeded 
cautiously  and  wisely  to  relieve  England  of  the  curse 
of  protection.  Cobden  many  years  afterwards  said  of 
Sir  Robert  Peel :  "My  own  conviction  is  that  Peel  was 
always  a  free  trader  in  theory;  in  fact,  on  all  political 
economical  questions  he  was  always  as  sound  in  the 
abstract  as  Adam  Smith  or  Bentham.  ...  It  was  a 
question  of  numbers  with  him ;  and  as  he  was  yoked 
with  a  majority  opposed,  he  was  obliged  to  go  their 
pace  and  not  his  own."  Sir  Robert  Peel  excited  great 
astonishment  in  his  first  budget.  Its  cardinal  point 
was  the  imposition  of  a  revenue  tax  of  yd.  per  pound 
on  income,  amounting  to  £1,200,000  a  year.  In  con- 
nection with  this  direct  tax  he  proposed  to  abolish  and 
reduce  the  duties  on  750  articles  on  which  high  duties 
had  been  imposed.  His  object  as  he  set  forth  was  to 
reduce  the  duties  on  the  raw  materials  which  constituted 


HOW    ENGLAND   GOT    FREE   TRADE  3I3 

the  elements  of  manufacture  to  an  almost  nominal 
amount,  on  half  manufactured  articles  which  entered 
almost  as  much  as  raw  material  into  domestic  manu- 
factures to  a  small  amount,  and  on  articles  completely 
manufactured  sufficiently  to  enable  the  home  producer 
to  compete  fairly  with  the  foreign  manufacturer,  and 
also  to  reduce  to  a  considerable  extent  the  cost  of  liv- 
ing. "If,"  said  Cobden  and  his  followers  in  their 
discussions  before  the  people,  "it  was  the  object  of  Sir 
Robert  Peel  to  reduce  the  cost  of  living,  and  he  wished 
to  do  this  effectually,  why  did  he  not  reduce  the  duties 
upon  the  agricultural  products  which  were  the  people's 
food?"  Sir  Robert  Peel,  however,  knew  that  he  could 
not  carry  his  party  at  that  time  for  such  a  measure,  so 
he  sought  to  remove  the  duties  upon  raw  materials  and 
to  reduce  largely  the  duties  upon  many  other  imports 
in  order  to  procure  a  sufficient  income  for  government 
while  his  authority  was  still  paramount  with  his  party. 
Then  if  the  experiment  proved  successful,  to  take  an- 
other step.  It  did  prove  successful  beyond  his  highest 
hopes.  The  revenue  of  government  was  greatly  in- 
creased while  the  manufacturers  were  relieved  from 
serious  burdens  and  their  exporting  enlarged  by  reason 
of  the  cheaper  production  through  decreased  cost  of 
raw  material.  While  Mr.  Cobden  and  his  followers  in 
the  House  of  Commons  did  not  oppose  the  reforms  of 
Sir  Robert  Peel,  they  introduced  yearly  a  motion  call- 
ing for  the  repeal  of  the  Corn  Laws  and  Mr.  Cobden 


314  THE    TARIFF    AND   THE    TRUSTS 

spoke  with  great  force  and  ability  upon  this  motion 
depicting  with  pathos  the  terrible  condition  of  the  poor 
of  England.  In  Manchester  alone  116  mills  had 
stopped  work,  two  thousand  families  were  reduced  to 
such  w^ant  as  to  have  pawned  even  their  beds,  twelve 
thousand  families  were  receiving  poor  relief  and  thou- 
sands subsisted  on  charity.  Out  of  50  mills  in  Bolton 
30  were  idle  and  6,995  persons,  whose  average  earnings 
were  only  13d.  a  w^eek,  were  aided  in  one  month  by  the 
Poor  Protection  Society.  Similar  conditions  prevailed 
throughout  all  the  cities  in  England,  and  while  the 
working  classes  were  on  the  verge  of  starvation,  Brit- 
ish corn  was  65s.  a  quarter  and  the  duty  on  foreign 
wheat  was  24s.  8d.  per  quarter.  After  describing  the 
great  supplies  of  corn  in  America  Mr.  Cobden  said: 
"Suppose  now  that  it  were  but  the  Thames  instead  of 
"the  Atlantic  which  divided  the  two  countries — sup- 
"pose  the  people  on  the  one  side  were  mechanics  and 
"artisans,  capable  by  their  industry  of  producing  a  vast 
"supply  of  manufactures ;  and  that  the  people  on  the 
"other  side  w^ere  agriculturalists,  producing  infinitely 
"more  than  they  could  themselves  consume  of  corn, 
"pork,  or  beef — fancy  these  two  separate  peoples  anx- 
"ious  and  w'illing  to  exchange  with  each  other  the  prod- 
"uce  of  their  common  industry,  and  fancy  a  demon  ris- 
"ing  from  the  middle  of  the  river — for  I  cannot  imagine 
"anything  human  in  such  a  position  and  performing 
"such  an  office — fancv  a  demon  rising  from  the  river, 


HOW    ENGLAND   GOT    FREE    TRADE  315 

"and  holding  in  his  hand  an  Act  of  Parliament,  and 
"saying,  'you  shall  not  supply  each  other's  wants ;'  and 
"then,  in  addition  to  that,  let  it  be  supposed  that  this 
"demon  said  to  his  victim  with  an  affected  smile,  'This 
"is  for  your  benefit:  I  do  it  entirely  for  your  protec- 
"tion!"  Where  is  the  difference  between  the  Thames 
"and  the  Atlantic?" 

It  was  about  the  time  of  Mr.  Cobden's  election  to  the 
House  of  Commons  that  he  enlisted  John  Bright  in  the 
free  trade  campaign.  Years  afterwards  Mr.  Bright 
told  the  story  of  how  it  occurred.  Only  thirty-eight 
years  old  he  had  just  suffered  a  deep  affliction  in  the 
loss  of  his  young  wife  and  was  overwhelmed  with  grief 
when  Cobden  called  to  condole  with  him.  Before 
leaving,  Cobden  said :  "There  are  thousands  of  houses 
in  England  at  this  moment  where  wives,  mothers,  and 
children  are  dying  of  hunger.  Now,  when  the  first 
paroxysm  of  your  grief  is  past,  I  would  advise  you  to 
come  with  me,  and  we  will  never  rest  till  the  Corn  Law 
is  repealed." 

During  the  Session  of  the  House  of  Commons  in 
1842,  2,881  separate  petitions,  signed  by  1,540,755  per- 
sons, were  presented  in  support  of  the  total  repeal  of 
the  Corn  Laws.  Sir  Robert  Peel,  however,  replied  to 
these  petitions  that  special  burdens  were  imposed  upon 
the  agriculturalists  in  the  nature  of  taxes,  that  he  was 
also  impressed  with  a  fear  of  dependence  upon  other 
countries  for  the  food  of  the  people  of  England,  and 


3l6  THE    TARIFF    AND   THE    TRUSTS 

that  he  desired  to  keep  the  price  of  wheat  between  54s. 
and  58s.  a  quarter  as  a  remunerative  price  for  agri- 
culture. To  accomplish  this,  he  proposed  a  law  com- 
mencing with  a  duty  of  20s.  when  wheat  was  as  low 
as  5 IS.  and  falling  to  is.  when  it  reached  73s.  Upon 
this  proposition  Mr.  Cobden  spoke  with  great  force, 
urging  that  it  was  a  fallacy  that  high  prices  made  high 
wages,  and  showing  that  the  wages  of  agricultural 
laborers  had  been  higher  when  the  prices  of  agricultural 
products  continued  for  long  periods  lower  than  at  that 
time.  He  said  to  the  Commons  that  it  was  a  well-fed 
people  alone  that  could  either  defend  the  country  or 
produce  wealth,  and  charged  them  with  bringing  about 
a  deterioration  of  the  population  and  "thus  spoiling  both 
the  animal  and  intellectual  creature."  "It  is  not,"  said 
he,  "a  potato-fed  race  that  will  ever  lead  the  way  in 
arts,  arms  or  commerce.  .  .  ."  Then  turning  to  Mr. 
Peel  he  said :  "You  have  reduced  the  tariff  on  700  arti- 
cles, but  you  have  omitted  the  two  that  can  give  ma- 
terial relief  to  the  people,  corn  and  sugar."  But  the 
sliding  scale  of  duties  became  the  law  and  the  corn  from 
the  United  States,  Russia  and  Prussia  was  kept  out  of 
Great  Britain.  In  a  recent  volume  entitled  "The 
Plungry  Forties"  are  gathered  by  Mrs.  Cobden  Unwin, 
a  daughter  of  Richard  Cobden,  the  testimony  of  men 
still  living  as  to  the  condition  of  the  laboring  people 
in  the  early  forties.  I  quote  from  this  book  the  words 
of  a  Sussex  laborer,  David  Miles :  "Ay,  I  reklects  the 


HOW    ENGLAND    GOT   FREE   TRADE  317 

"early  forties  afore  the  Corn  Laws  wor  repealed. 
'"Taters  was  what  folks  lived  on  then,  an'  the  Tories 
'"ud  'ave  it  that  a  red  'errin'  and  a  'tater  wor  good 
"enuff  for  any  workin'man.  When  I  wor  just  on 
"twelve  the  'taters  failed,  an'  never  shall  I  forgit  'ow 
"the  folks  went  a-wanderin'  about,  peerin'  at  the 
"'taters,  and  tryin'  to  find  out  what  wor  wrong  wi'  'em. 
"It  wor  awful  bad  for  the  low  class ;  many  on  'em 
"were  nigh  starvin'.  If  'ee  complained  to  the  masters, 
"they  on'y  said,  quite  indifif'rent,  *  'Ee  can  go  ;  we  don't 
"want  'ee.'  An'  if  'ee  went  to  the  vestry,  which  they 
"wor  every  blessed  one  on  'em  farmers,  and  said  'ow 
"'ee  wanted  work,  they'd  ask,  'Who've  'ee  bin  a-workin' 
"for?'  an'  when  'ee  answered,  'Mr.  So-an'-so,'  up  the 
"farmer  'd  get  and  declare  'ee  was  dissatisfied,  and  then 
"ne'er  a  one  'ud  have  anythin'  more  to  do  with  'ee. 
"'Twas  ne'er  a  bit  o'  good  leavin'  the  parish;  they'd 
"ask  'ee  where  did  'ee  come  from,  and  when  'ee  said, 
"  'Heyshott,'  they'd  say  as  'ow  they  didn't  want  no 
"furriners,  and  that  there  'ud  be  the  end  o't." 

So  terrible  was  the  condition  of  the  people  that  tens 
of  thousands  of  half-starved  mill  hands  in  Lancashire 
and  Manchester  and  in  other  parts  of  England  were 
incited  by  the  Chartists  to  cease  working  and  to  make 
demonstrations  through  the  country  which  threatened 
the  disturbance  of  the  peace.  Crowds  of  factory  hands 
went  about  compelling  mill  hands  in  other  villages  to 
cease  work  and  declaring  their  intention  not  to  return 


3l8  THE    TARIFF    AND   THE    TRUSTS 

to  work  until  they  had  obtained  the  charter.  These 
poor  deluded  workmen,  believing  in  the  statements 
of  Chartist  speakers  that  high  prices  made  high  wages, 
in  many  cases  burned  stacks  of  wheat,  so  that  the  price 
of  their  labor  would  be  increased.  Mr.  Cobden  and 
his  followers  did  all  they  could  to  quiet  these  disorders. 
At  Rochdale  Mr.  Bright  helped  to  restore  order  and 
quiet  by  an  address  to  the  workingmen  in  which  he 
discussed  their  condition,  explained  the  causes  of  their 
misery  and  showed  them  that  the  charter  was  no 
remedy  for  their  condition  and  that  still  less  would 
public  disturbance  relieve  them. 

In  February,  1843,  ^  painful  incident  occurred  in 
the  Parliamentary  life  of  ]\Ir.  Cobden  which  threatened 
for  a  moment  the  success  of  the  Anti-Corn  Law 
League.  The  Queen's  speech  at  the  opening  of  the 
session  contained  these  words:  "Her  Majesty  regrets 
the  diminished  receipts  from  some  of  the  ordinary 
sources  of  revenue.  Her  Majesty  fears  that  it  must 
be  in  part  attributed  to  the  reduced  consumption  of 
articles  caused  by  that  depression  of  the  manufactur- 
ing industry  of  the  country  which  has  so  long  pre- 
vailed and  which  her  Majesty  has  so  deeply  lamented." 
Lord  Howick,  at  an  early  night  in  the  session,  moved 
that  the  House  should  resolve  itself  into  a  committee 
to  consider  the  passage  in  the  Queen's  speech  in  which 
reference  had  been  made  to  the  prevailing  distress. 
The  debate  on  this  question  extended  over  five  nights. 


HOW    ENGLAND   GOT    FREE    TRADE  3I9 

Mr.  Morley,  in  his  "Life  of  Cobden,"  describes  the 
words  of  Mr.  Cobden  and  the  scene  which  followed 
on  the  last  night  of  the  debate  as  follows :  "If  you 
[Sir  Robert  Peel]  try  any  other  remedy  than  ours, 
what  chance  have  you  for  mitigating  the  condition 
of  the  country?  You  took  the  Corn  Laws  into  your 
own  hands  after  a  fashion  of  your  own,  and  amended 
them  according  to  your  own  views  ....  You  passed 
the  law,  you  refused  to  listen  to  the  manufacturers, 
and  /  throw  on  you  all  the  responsibility  of  your  ozvn 
measure  ....  It  was  folly  or  ignorance"  (Oh! 
Oh!).  "Yes,  it  was  folly  or  ignorance  to  amend  our 
system  of  duties,  and  leave  out  of  consideration  sugar 
and  corn  .  .  .  and  I  must  tell  the  right  Hon.  Baronet 
that  //  is  the  duty  of  every  honest  and  independent 
member  to  hold  him  individually  responsible  for  the 
present  position  of  the  country."  When  Cobden  sat 
down,  the  Prime  Minister  rose  to  his  feet,  with  signs 
of  strong  agitation  in  his  usually  impassive  bearing. 
"Sir,"  he  said,  "the  honorable  gentleman  has  stated 
here  very  emphatically,  what  he  has  more  than  once 
stated  at  the  conferences  of  the  Anti-Corn  Law  League, 
that  he  holds  me  individually" — here  the  speaker  was 
interrupted  by  the  intense  excitement  which  his  em- 
phasis on  the  word,  and  the  growing  passion  of  his 
manner,  had  rapidly  produced  among  his  audience. 
"Individually  responsible,"  he  resumed,  "for  the  dis- 
tress and  suffering  of  the  country ;    that  he  holds  me 


320  THE   TARIFF    AND   THE   TRUSTS 

personally  responsible.  But  be  the  consequences  of 
these  insinuations  what  they  may,  never  will  I  be  in- 
fluenced by  menaces,  either  in  this  House  or  out  of 
this  House,  to  adopt  a  course  which  I  consider — "  The 
rest  of  the  sentence  was  lost  in  the  shouts  which  now 
rose  from  all  parts  of  the  House.  Cobden  at  once  got 
up,  but  to  little  purpose.  "I  did  not  say,"  he  began, 
"that  I  hold  the  right  Hon.  gentleman  personally  re- 
sponsible." Vehement  cries  arose  on  every  side ; 
"Yes,  yes"— "You  did,  you  did"— "Order"— "Chair." 
"You  did,"  called  out  Sir  Robert  Peel.  Cobden  went 
on,  "I  said  that  I  held  the  right  Hon.  gentleman  re- 
sponsible by  virtue  of  his  office,  as  the  whole  context 
of  what  I  said  was  sufficient  to  explain."  This  aflfair 
was  the  talk  of  all  the  newspapers  of  England,  and 
was  read  by  all  the  people  with  great  excitement.  Sir 
Robert  Peel's  friends  claimed  that  it  was  a  personal 
threat  against  the  Prime  Minister  while  the  members 
of  the  Anti-Corn  Law  League  and  their  adherents 
claimed  that  it  was  simply  addressed  to  Sir  Robert 
Peel  as  the  representative  of  the  Tory  party  with  no 
thought  of  threatening  him  with  violence. 

In  July,  1843,  Mj*-  Bright  was  returned  as  member 
for  Durham,  and  thereafter  he  and  Mr.  Cobden  stood 
shoulder  to  shoulder  in  the  Commons  for  the  repeal 
of  the  Corn  Laws.  Nor  did  the  words  so  unfortu- 
nately addressed  to  Sir  Robert  Peel  stay  the  work  of 
the  League.     During  the  year  1843  more  than  9,000,000 


HOW    ENGLAND   GOT    FREE   TRADE  321 

tracts  or  stamped  publications  were  distributed  by  the 
Anti-Corn  Law  League,  hundreds  of  thousands  of 
pounds  were  contributed  for  the  campaign,  and  six 
hundred  and  fifty  lectures  were  delivered  throughout 
England  and  Scotland.  The  League  now  determined 
to  carry  the  crusade  into  the  agricultural  counties, 
and  to  teach  the  farmers  and  rural  laborers  that  they 
also  were  interested  in  the  success  of  manufacturers 
and  had  a  common  cause  with  the  workers  in  those 
industries  in  their  need  for  cheap  food  and  enlarged 
foreign  markets.  Mr.  Bright  and  Mr.  Cobden  spoke 
together  through  the  great  agricultural  centers  of 
England  and  in  many  of  the  English  cities.  Attempts 
were  made  to  sLorm  the  hustings,  and  threats  of  vio- 
lence were  heard  at  many  meetings.  Farmers  were 
afraid  to  attend  the  meetings  in  their  immediate  neigh- 
borhood, and  sometimes  would  travel  forty  miles 
from  home  where  they  could  listen  to  the  speakers 
without  being  known.  Men  were  sent  to  the  meetings 
to  put  questions  to  the  speakers.  Cobden  and  Bright 
challenged  the  members  of  the  Commons  representing 
the  districts  in  which  they  spoke  to  meet  them  in  de- 
bate, and  on  several  occasions  succeeded  so  fully  in 
convincing  the  farmers  and  the  laborers  that  the  Corn 
Laws  were  injurious  to  their  interests  that  by  a  vote 
at  the  end  of  the  meeting  resolutions  in  favor  of  free 
corn  were  carried.  Open-air  meetings,  with  thousands 
of  hearers,   took   place  all   over   England.    At  these 

21 


322  THE    TARIFF    AND   THE    TRUSTS 

meetings  free-trade  processions  carried  big  loaves  of 
bread  called  free-trade  loaves  and  small  ones  called 
protection  loaves  on  poles  and  exhibited  them  to  the 
people.  But  the  lecturers  in  the  smaller  places  did  not 
fare  so  well.  In  many  of  these  they  were  denied  the 
use  of  the  streets  or  the  town  hall  or  entertainment 
at  the  hotels  and  farmers  would  offer  a  bushel  of  wheat 
or  more  to  any  one  who  would  throw  the  speaker 
into  the  river.  When  they  talked  in  the  street  they 
were  frequently  arrested  and  fined  for  creating  a  dis- 
turbance, and  at  every  point  the  great  landlords 
harassed  the  speakers  and  made  their  life  as  unhappy 
as  possible. 

Nor  was  the  campaign  confined  to  the  country  dis- 
tricts. In  March,  1843,  Drury  Lane  Theatre  in  Lon- 
don was  engaged  for  a  week,  and  vast  assemblies 
crowded  to  hear  the  addresses.  Later  a  fund  of 
£100,000  was  raised  to  engage  Covent  Garden  for 
fifty  nights  for  a  bazaar  and  demonstration,  and  to 
publish  a  weekly  paper  "The  League."  During  this 
year  several  famous  lords  and  great  landowners  de- 
clared themselves  converts  to  the  League  and  con- 
tributed considerable  sums  of  money  for  its  support. 
In  November,  1843,  ^^^^  London  Times,  speaking  of 
the  great  subscriptions  which  were  being  raised  for 
the  continuance  of  the  work  of  the  League  and  of  the 
persistence  of  its  agitators,  said :  "These  are  facts  im- 
portant  and    worthy   of   consideration.     No   moralist 


HOW    ENGLAND   GOT    FREE   TRADE  323 

can  disregard  them,  no  politician  can  sneer  at  them, 
no  statesman  can  undervalue  them.  He  who  collects 
opinions  must  chronicle  them.  He  who  frames  the 
laws  must  to  some  extenc  consult  them.  The  League 
may  be  a  hypocrite,  a  huge  Trojan  horse  of  sedition 
but  the  League  exists  ...  A  new  power  has  arisen 
in  the  state,  and  maids  and  matrons  flock  to  theatres 
as  though  it  were  but  a  new  translation  from  the 
French."  In  the  year  1844  Mr.  Bright  and  Mr. 
Cobden  set  out  together  for  Edinborough  to  speak  at 
all  the  principal  places  upon  the  way.  Li  Glasgow  at 
a  single  meeting  £3,000  was  raised  for  the  League. 
The  demand  for  speakers  at  meetings  in  Scotland 
became  so  great  that  Cobden  and  Bright  separated 
each  with  a  group  of  friends,  Cobden  going  to  the 
east  of  Scotland  and  Bright  to  the  west.  Every  city 
they  visited  presented  them  with  the  freedom  of  their 
burghs.  Tens  of  thousands  of  people  listened  to  them 
and  the  great  majority  of  the  people  of  Scotland  es- 
poused the  principles  of  the  Anti-Corn  Law  League. 
During  the  month  of  February,  1844,  the  League  con- 
ducted a  special  agitation  in  London,  and  large  public 
meetings  were  held  in  Covent  Garden  Theatre. 

In  Parliament  that  year  Mr.  Cobden  introduced  a 
motion  for  the  appointment  of  a  committee  "to  inquire 
into  the  effects  of  the  protective  duties  on  the  interests 
of  the  tenant  farmers  and  laborers  of  this  country." 
He  concluded  his  address  by  moving  for  a  select  com- 


324  THE    TARIFF    AND   THE   TRUSTS 

mittee  of  inquiry  because  ''the  present  system  robs  the 
earth  of  its  fertiUty  and  the  laborer  of  his  hire,  deprives 
the  people  of  subsistence  and  the  farmer  of  feelings  of 
honest  independence."  Mr.  Bright  followed  him  and 
urged  that  "if  the  majority  thought  that  the  justice  of 
the  Corn  Laws  could  be  proved  they  would  grant  the 
committee  at  once."  But  they  did  not  grant  the  com- 
mittee. The  depression  among  the  farmers  and  the 
agricultural  laborers  grew  during  the  year  1844. 
Wages  fell  to  7s.  and  5s.  a  week,  with  wheat  at  5is.3d, 
a  quarter.  Laborers  living  upon  potatoes  and  meal 
were  at  starvation  level.  In  Suffolk  and  Essex  the 
wretched  peasantry  set  fire  to  the' ricks  of  corn,  believ- 
ing that  thereby  they  would  raise  the  price  of  wheat, 
and  consequently  their  wages,  just  as  our  Southern 
planters  a  few  years  ago  burned  some  of  their  cotton 
to  increase  the  price.  Men  destroyed  machinery  be- 
cause the  Chartist  leaders  taught  that  the  depression 
was  the  result  of  improved  machinery.  We  wonder 
at  such  ignorance,  but  it  is  simply  in  accord  with  the 
teaching  of  Mr.  Horace  Greeley,  Mr.  Henry  C.  Carey, 
and  Mr.  Gaylord  Wilshire.  Mr.  Greeley  could  see 
great  benefits  to  labor  from  the  burning  of  Chicago. 
Mr.  Carey  declared  again  and  again  that  one  of  the 
greatest  human  calamities,  a  prolonged  war  between 
Great  Britain  and  the  LTnited  States,  would  be  the 
very  best  possible  thing  for  the  United  States,  and  Mr. 
Gaylord  Wilshire  has  recently  maintained  that  the  San 


HOW    ENGLAND    GOT    FREE    TR.\DE  325 

Francisco  earthquake  will  aid  in  continuing  the  pros- 
perity of  the  country. 

The  income  tax  of  1842  was  to  continue  only  for  a 
period  of  three  years,  and  in  1845  Sir  Robert  Peel 
reported  that  the  duties  from  a  few  articles  like  tea,  cof- 
fee, sugar,  and  other  commodities  had  produced  a 
large  amount  of  revenue,  and,  with  the  income  tax, 
had  more  than  supplied  the  needs  of  government. 
He  proposed  to  continue  the  income  tax  for  three  years 
and  to  strike  the  protective  duties  from  430  articles 
then  on  the  tariff  list,  saying  to  his  followers  that  this 
would  be  a  great  advantage  to  commerce.  Among 
the  raw  materials  made  free  were  silk,  hemp,  flax, 
yarns  (except  woolen),  furniture,  goods,  manures, 
oils,  minerals  (except  copper  ores),  dye  stuffs,  and 
drugs.  In  addition  the  remaining  export  duties  were 
discarded,  including  the  export  duty  on  coal  which  had 
remained  upon  the  statute-book  for  centuries.  Al- 
though this  change  made  a  considerable  reduction  on 
sugar,  it  still  preserved  full  duties  in  favor  of  the 
British  West  Indies,  as  against  Cuba  and  Brazil, 
where  sugar  was  raised  by  slave  labor.  The  false 
reason  for  this  was  the  discouragement  of  slavery. 
The  true  reason  was  that  a  few  men,  powerful  sup- 
porters of  Sir  Robert  Peel's  administration,  owned  the 
sugar  plantations  in  the  West  Indies,  and  their  sup- 
port was  needed  to  carry  out  the  other  reforms  which 
he    proposed.     In    Alarch,    1845,    Mr.    Cobden    again 


326  THE   TARIFF    AND   THE    TRUSTS 

moved  in  the  House  of  Commons  to  appoint  a  select 
committee  "to  inquire  into  the  causes  and  extent  of  the 
alleged  existing  agricultural  distress  and  into  the  ef- 
fect of  legislative  protection  upon  the  interests  of  land- 
owners, tenant  farmers,  and  farm  laborers."  He  con- 
tended that  the  present  tariff  on  corn  being  subject  to 
frequent  changes  created  great  uncertainty  and  in- 
security of  tenure,  since  farmers  would  not  lease  land 
for  long  periods  of  time  with  no  certainty  as  to  the 
price  of  corn,  saying,  "Capital  shrinks  instinctively 
from  insecurity  of  tenure,  and  we  have  not  in  England 
that  security  which  will  warrant  men  of  capital  invest- 
ing their  money  in  the  soil."  He  declared  the  funda- 
mental fallacy  of  protection  to  be  "Taxing  the  whole 
community  for  the  benefit  of  a  section,"  and  argued 
that  a  law  which  impoverished  men  destroyed  their 
capacity  for  consumption,  and  therefore  injured  manu- 
facturing, saying,  "There  are  960,000  agricultural 
laborers  in  England  and  Wales,  and  each  of  them  does 
not  spend  30s.  a  year  in  manufactures  on  his  whole 
family  if  the  article  of  shoes  be  excepted."  In  con- 
clusion, he  appealed  to  the  landowners,  the  high  aris- 
tocracy of  England,  "To  play  in  a  mercantile  age  that 
noble  part  which  in  feudal  times  had  made  their  an- 
cestors the  leaders  of  the  people."  Of  his  speech  Mr. 
Morley  says :  "The  Prime  Minister  had  followed 
every  sentence  with  earnest  attention ;  his  face  grew 
more  and   more  solemn  as   the  argument  proceeded. 


HOW    ENGLAND   GOT   FREE   TRADE  327 

At  length  he  crumpled  up  the  notes  which  he  had  been 
taking  and  was  heard  by  an  overlooker  to  say  to  Mr. 
Sydney  Herbert,  who  sat  next  him  on  the  bench,  'You 
must  answer  this,  for  I  cannot.'  " 

The  end  of  the  corn  duties  was  at  hand.  Famine 
had  joined  hands  with  the  Anti-Corn  Law  League. 
The  diet  of  the  Irish  people  at  this  time  was  largely 
potatoes.  In  some  parts  of  Ireland  they  were  almost 
the  only  produce  of  the  land  and  the  sole  means  of 
subsistence.  In  the  middle  of  October,  1845,  the  crops 
were  attacked  by  blight,  and  the  people  were  threatened 
with  famine.  Anxious  correspondence  took  place  be- 
tween Sir  Robert  Peel  and  Sir  James  Graham,  a  mem- 
ber of  his  Cabinet,  and  a  commission  to  inquire  into 
the  state  of  the  potato  crop  was  sent  to  Ireland.  In 
Manchester  and  throughout  England  the  League  held 
vast  meetings  and  appealed  to  government  to  grant 
relief  by  opening  the  ports.  On  October  27th  Sir 
Robert  Peel  wrote  to  Sir  James  Graham,  "The  Anti- 
Corn  Law  pressure  is  about  to  commence,  and  it  will 
be  the  most  formidable  movement  of  modern  times. 
Everything  depends  upon  the  skill,  promptitude,  and 
decision  with  which  it  is  met."  Daniel  O'Connell,  who 
had  long  been  a  member  of  the  League  and  who  had 
fought  its  battle  in  Ireland  almost  single-handed,  sent 
accounts  from  Ireland  of  the  terrible  conditions,  and 
demanded  that  party  conflict  should  be  laid  aside  in 
the  presence  of  the  great  calamity  impending  over  his 


328  THE    TARIFF    AND    THE    TRUSTS 

people.  On  the  31st  day  of  October  Sir  Robert  Peel 
proposed  to  his  Cabinet  that  the  ports  should  be  opened 
to  the  admission  of  foreign  grain  by  an  Order  in 
Council  and  that  Parliament  should  be  called  together 
not  lacer  than  the  27th  of  November.  They  separated 
without  coming  to  a  conclusion  and  again  came  to- 
gether on  the  6th  day  of  November.  The  proposals 
of  the  Prime  Minister  were  supported  by  only  three 
members,  the  Earl  of  Aberdeen,  Sir  James  Graham, 
and  Mr.  Sydney  Herbert.  On  the  226.  day  of  No- 
vember Lord  John  Russell,  the  leader  of  the  Whig 
party,  who  was  in  Edinburgh  watching  the  progress 
of  events,  wrote  an  open  letter  to  his  London  constitu- 
ents in  which  he  said :  'T  used  to  be  of  the  opinion 
that  corn  was  an  exception  to  the  general  rules  of  politi- 
cal economy,"  but  that  he  had  changed  his  opinions, 
and  at  last  had  become  convinced  of  the  folly  of  the 
whole  protective  system.  He  concluded  his  letter  as 
follows :  "Let  us,  then,  unite  to  put  an  end  to  a  system 
which  has  proved  to  be  the  blight  of  commerce,  the 
bane  of  agriculture,  the  source  of  bitter  divisions  among 
classes,  the  cause  of  penury,  fever,  mortality  and  crime 
among  the  people."  Sir  Robert  Peel,  with  Lord 
Russell's  letter  before  him,  because  of  the  disagree- 
ment in  his  Cabinet,  tendered  to  the  Queen  his  resig- 
nation as  Prime  Minister,  and  the  Queen  accepted  it, 
and  called  upon  Lord  John  Russell  to  form  a  Ministry. 
He  was  unable  to  do  so,  and  her  Majesty  recalled  Sir 


HOW    ENGLAND   GOT    FREE    TRADE  329 

Robert  Peel  and  asked  him  to  resume  office.  All  of 
his  prior  associates,  with  the  exception  of  Lord  Scan- 
ley,  agreed  to  act  with  him,  and  he  returned  to  office 
relieved  from  his  party  pledges  and  proceeded  to  pre- 
pare measures  for  abolishing  the  Corn  Laws.  The 
League,  however,  were  active,  and  at  a  great  meeting 
in  Free  Trade  Hall  at  Manchester  on  the  23d  of 
December  determined  to  raise  a  subscription  of  £250,000 
for  carrying  on  their  work.  Of  this  meeting  at  Man- 
chester Mr.  Morley  says :  "The  scene  has  often  been 
described  how  one  man  after  another  called  out  in 
quick  succession  'A  thousand  pounds  for  me,'  'A 
thousand  pounds  for  us,'  and  so  forth  until  in  less 
than  a  couple  of  hours  i6o,ooo  had  been  subscribed 
on  the  spot.  There  were  23  persons  or  firms  who  put 
down  iiooo  each,  and  25  persons  half  as  much."  On 
the  20th  of  January,  1846,  the  Queen  opened  Parlia- 
ment, and  in  her  address  recommended  in  general 
terms  a  revision  of  the  tariff.  Sir  Robert  Peel,  in 
addressing  the  House  of  Commons,  stated  that  he  had 
closely  watched  the  operation  of  protective  duties  dur- 
ing the  past  four  or  five  years,  and  was  now  convinced 
that  the  arguments  in  favor  of  their  maintenance 
were  no  longer  tenable.  He  was  convinced  that  high 
wages  were  not  the  result  of  high  prices  of  food.  He 
stated  in  detail  to  the  House  the  increase  in  the  amount 
of  exports  since  the  revision  of  the  tariff  in  1842,  but 
did  not  disclose  to  the  House  his  intention  to  propose 


330  THE    TARIFF    AND   THE    TRUSTS 

a  repeal  of  the  Corn  Laws.  On  January  27,  1846,  he 
proceeded  to  disclose  fully  the  changes  contemplated, 
carefully  presenting  all  the  duties  upon  manufactured 
articles  which  were  to  be  removed,  and  the  reasons 
for  their  removal,  and  finally  completed  by  proposing 
the  repeal  of  the  Corn  Laws,  to  take  effect  in  1849, 
with  a  largely  decreased  duty  in  the  meantime.  The 
first  reading  of  his  bill  was  carried  by  a  majority  of 
337  votes,  made  up  largely  of  Whigs  and  Free  Traders, 
to  240,  opposed.  The  motion  was  made  to  go  into 
committee  on  the  resolutions  on  the  9th  of  February, 
1846,  and  after  twelve  nights  of  debate  and  one  hun- 
dred and  three  speeches,  by  a  majority  of  97,  the  bill 
was  finally  passed,  sent  to  the  House  of  Lords,  and 
there,  through  the  influence  of  the  Duke  of  Wellington, 
passed  and  returned  to  the  Commons  on  the  very  night 
when  the  indignant  landlords,  uniting  with  the  Whigs 
and  with  O'Connell,  defeated  the  Coercion  Act  of  the 
government  applying  to  Ireland,  and  Sir  Robert  Peel 
resigned  his  office.  In  announcing  his  resignation 
Peel  made  an  eloquent  speech  in  which  he  ascribed  to 
Cobden  the  chief  credit  of  passing  the  Corn  Bill,  saying, 
"The  name  that  ought  to  be  associated  with  the  suc- 
cess of  the  measure  is  the  name  of  a  man,  who,  acting, 
I  believe,  from  pure  and  disinterested  motives,  has 
advocated  this  cause  with  untiring  energy  and  by  ap- 
peals to  reason."  A  few  days  later,  at  the  Free  Trade 
Hall  in  Manchester  before  thousands  of  people,  Cobden 


HOW    ENGLAND   GOT    FREE    TRADE  331 

said  of  Sir  Robert  Peel :    "If  he  has  lost  office  he  has 
gained  a  country." 

In  1852  Mr.  Gladstone  became  Chancellor  of  the 
Exchequer  and  proceeded  to  complete  the  policy  of  Sir 
Robert  Peel.  He  removed  the  duties  on  123  articles 
and  reduced  those  on  133  others,  including  most  of 
the  remaining  duties  on  food.  In  i860  he  resumed 
the  task,  and  reduced  the  number  of  taxed  imports  to 
48,  removing  the  last  duty  on  manufactures  of  wool 
and  silk  and  all  differential  duties.  The  timber  duties 
were  abolished  in  1866,  the  shilling  registration  duty 
on  corn  in  1869,  and  the  duty  on  sugar  in  1875.  The 
English  tariff  now  is  very  simple,  being  levied  on  only 
fifteen  classes  of  goods  and  for  revenue  only.  Of 
these  tobacco,  tea,  spirits,  and  wine  produce  about  nine- 
tenths  of  the  whole  customs  revenue  of  £21,250,000. 
The  landowners  and  farmers  enjoyed  for  a  period  of 
twenty-five  years  after  the  repeal  of  the  Corn  Laws 
such  prosperity  as  they  had  never  known,  the  price  of 
their  products  as  well  as  of  their  labor  having  greatly 
increased.  The  wealth  of  the  United  Kingdom  in 
1840  was  $20,000,000,000.  In  a  paper  read  before  the 
British  Association  in  September,  1903,  the  great 
statistician,  Sir  Robert  Giffen,  estimated  the  wealth  of 
the  United  Kingdom  of  Great  Britain  at  $75,000,000,- 
000,  equal  to  that  of  Germany  and  France  combined. 
The  people  of  Great  Britain  receive  upon  their  invest- 
ments in  foreign  countries  and  in  their  colonies  $500,- 


332  THE   TARIFF   AND   THE    TRUSTS 

000,000  yearly.  The  ship-owners  of  Great  Britain  re- 
ceive from  freights  and  charter  moneys  of  their  ves- 
sels in  the  neighborhood  of  $500,000,000  more.  Since 
1840  pauperism  has  decreased  fifty  per  cent.,  and  the 
price  of  labor  increased  about  seventy-five  per  cent., 
and  the  cost  of  the  necessaries  of  life  decreased  nearly 
half.  Great  Britain  exports  of  highly  manufactured 
articles  nearly  as  much  as  Germany  and  France  com- 
bined. Mr.  Gladstone,  speaking  to  the  electors  of  Mid- 
lothian in  the  month  of  November,  1885,  said:  "I  do 
not  deny  that  there  is  distress,  but  it  is  less  than  it  was 
before  the  free-trade  reformation.  When  that  reform 
began  trade  increased  to  a  degree  unexampled  in  the 
history  of  the  world  .  .  .  The  country  has  made  a 
great  step  forward,  and  will  not  go  back."  Then 
pointing  to  the  mountains  in  the  distance,  he  said: 
"You  might  as  well  try  to  uproot  the  Pentlands  from 
their  base  and  fling  them  into  the  sea."  In  the  con- 
test of  1905  the  issue  was  squarely  drawn  between  the 
Conservatives,  led  by  Joseph  Chamberlain,  advocating 
differential  duties  against  foreign  countries  and  duties 
to  be  agreed  upon  with  her  free  colonies,  and  the 
Liberals,  Nationalists,  and  Labor  Party  on  the  other 
side.  The  result  was  that  the  Liberals  elected  385 
members  of  the  House  of  Commons,  the  Nationalists 
84,  and  the  Labor  Party  43,  while  the  Conservatives 
elected  only  158,  giving  the  free  traders  512  out  of  the 
670  members  in  the  House  of  Commons. 


CHAPTER  X 


THE   TARIFF   IN    GERMANY 


The  history  of  Prussia  and  of  the  German  states 
prior  to  the  nineteenth  century  is  one  of  universally 
restricted  trade.  Every  district  in  Germany  regarded 
its  neighbor  as  foreign,  and  every  locality  had  its  special 
tariffs.  The  guilds  still  existed ;  the  petty  barons 
exercised  jurisdiction  over  the  commerce  upon  rivers, 
those  of  the  Rhine  imposing  tolls  upon  boats,  and  all 
attempts  to  trade  were  hampered  with  regulations. 
The  leading  idea  of  Frederick  the  Great  was  to  make 
Prussia  a  self-sustaining  state.  He  erected  barriers 
around  her  frontiers  for  the  purpose,  not  only  of  re- 
stricting imports,  but  of  preventing  exports.  He  for- 
bade the  introduction  of  any  class  of  goods  into 
Prussia  that  could  be  produced  at  home.  He  was 
wise  enough,  however,  to  know  that  it  was  better 
policy  to  export  manufactured  goods  than  raw  materi- 
als, since  in  that  case  the  foreigner  was  purchasing  the 
labor  of  the  exporting  country,  so  he  forbade  the  ex- 
port from  Prussia  of  raw  material.  If  the  foreign- 
er's goods  were  not  sought,  the  foreigners  themselves 
were  welcomed,  and  the  Thirty  Years  War  having  de- 

333 


334  THE    TARIFF    AND   THE    TRUSTS 

populated  the  country  and  destroyed  its  wealth,  he 
sought  immigration  from  Holland  and  France.  He 
encouraged  the  small  peasant  proprietors,  aided  them 
by  subsidies,  built  roads  and  canals,  did  away  with  the 
ancient  guild  system,  encouraged  foreign  trade  enter- 
prises by  establishing  trading  companies,  and  made 
Prussia,  so  far  as  his  powerful  will  could  accomplish 
it,  a  self-sustaining  state.  At  the  beginning  of  the 
last  century  Prussia  was  one  of  the  great  agricultural 
states  of  Europe,  eighty  per  cent,  of  its  inhabitants 
following  the  occupation  of  agriculture.  During  the 
reign  of  Frederick  William  HI  and  under  the  wise 
statesmanship  of  Stein  and  Hardenburg,  Prussia  was 
given  greater  freedom  in  thought,  in  speech,  in  action, 
in  trade,  in  industry,  and  in  government.  In  the 
second  decade  of  the  nineteenth  century  the  direct 
encouragement  of  industry  by  state  aid  ceased,  to  be 
renewed  only  in  recent  times.  A  Cabinet  order  is- 
sued by  Frederick  William  HI  from  Carlsbad,  August 
I,  1817,  declared  that  the  principle  of  free  import  of 
foreign  manufactures  in  return  for  a  small  duty  should 
be  the  basis  of  the  legislation  of  the  Prussian  state  for 
all  future  time.  Some  slight  reaction  inspired  by  the 
teachings  of  Fredrich  List  occurred  later,  but  so  free 
was  the  trade  of  Prussia  that  William  Huskinson  ex- 
pressed a  hope  in  the  House  of  Commons  in  1825  that 
the  time  would  come  when  England  would  follow 
Prussia's  example. 


THE    TARIFF    IN    GERMANY  335 

In  1817  the  representative  of  Wtirtemburg  in  the 
Federal  Diet  brought  forward  a  proposition  for  the 
confederation  of  the  German  states  for  commercial 
and  customs  purposes  on  the  basis  of  the  Prussian 
Law,  and  later,  between  1819  and  1833,  a  customs 
union  known  as  the  Zollverein,  between  eighteen 
states,  with  a  population  of  23,000,000  people,  was 
concluded  to  continue  for  a  period  of  eight  years. 
Before  those  years  had  expired  several  other  states  had 
joined  the  union,  the  customs  duties  being  levied  for 
the  common  account  and  divided  among  the  contract- 
ing states  according  to  population.  In  1867,  by  treaty 
between  the  North  German  Confederation  and  South 
German  States,  a  new  customs  union  was  concluded, 
with  a  Parliament  armed  with  legislative  powers  in 
customs  matters  for  a  period  of  twelve  years.  Two 
years  later  the  customs  laws  and  ordinances  of  the 
Union  were  modified,  and  they  passed  into  the  legis- 
lation of  the  New  Empire,  becoming  substantially  the 
basis  of  the  new  fiscal  system  which  lasted  until  1879. 
The  late  Professor  Albert  Schaffle  writes  of  this  cus- 
toms union  as  follows :  "Until  the  beginning  of  the 
sixties,  under  a  largely  bureaucratic  treaty  system  of 
administration,  the  Zollverein  maintained  a  commercial 
policy  which,  w^hile  moderately  protective  and  fairly 
stable,  yet  slowly  and  cautiously  aimed  at  freedom  of 
trade."  The  conclusion  of  Prussia  in  1862  of  a  treaty 
of  commerce  with  France,  came  into  operation  through- 


33^  THE   TARIFF   AND   THE    TRUSTS 

out  the  entire  area  of  the  Zollverein  in  1865,  and  gave 
a  stimukis  to  the  new  movement.  Prince  Bismarck 
carried  that  treaty  through  the  Prussian  Pariiament, 
and  he  was  at  that  time  not  only  a  free  trader,  but  the 
favorite  of  the  free-trade  party.  After  the  French 
treaty  and  during  the  sixties  the  free-trade  sentiment 
among  German  manufacturers  and  educated  men  in- 
creased. On  August  27,  1867,  a  Congress  of  poHtical 
economists  and  representatives  of  industry  was  held  at 
Hamburg,  and  they  called  for  the  immediate  revision 
of  the  customs  tariff  in  a  free-trade  spirit.  It  was 
recommended  that  the  tariff  should  henceforth  be  re- 
stricted to  a  few  articles  chosen  for  their  suitability  as 
sources  of  revenue,  and  that  thus,  "by  abolition  of  the 
protective  system,  larger  resources  might  be  secured 
to  the  community  and  the  state,  and  elbow-room  be 
given  for  the  economic  activity  of  the  individual."  In 
1868  the  duties  on  wine  were  reduced,  in  1869  those  on 
sugar,  then  came,  in  1873,  the  reduction  of  the  iron 
duties,  and  finally,  in  1875,  a  law  was  enacted  provid- 
ing for  their  entire  disappearance,  to  take  effect  from 
the  first  day  of  1877.  The  abandonment  of  the  pro- 
tectionist policy  was  the  work  of  three  Prussian  Min- 
isters :  Martin  Fricdrich  Rudolf  Delbruck,  Otto 
Camphausen.  and  August  von  der  Heydt.  The  trend 
of  opinion  among  competent  observers  seems  to  be  that 
the  tariff  policy  of  the  Zollverein,  with  interstate  free- 
dom of  trade,  opened  up  great  possibilities  of  internal 


THE   TARIFF    IN    GERMANY  337 

growth,  and  that  the  moderate  tariff  which  it  estab- 
lished was  a  shelter  especially  against  English  com- 
petition and  tended  to  lay  the  foundation  for  the  recent 
growth  of  manufacturing. 

The  Franco-German  War  transformed  Germany. 
The  French  indemnity  was  paid  over  long  before  it 
had  been  expected  and  was  expended  too  rapidly  for 
Germany's  good.  Of  this  indemnity  a  German  writer 
says :  "It  broke  over  us  like  a  waterspout  carrying 
devastation  everywhere,  whereas,  if  it  had  fallen 
gradually  in  the  course  of  time  and  in  small  quantities, 
it  might  have  been  beneficial  in  an  extraordinary  de- 
gree." Bismarck,  in  a  speech  before  the  Reichstag 
made  May  2,  1879,  said:  ''I  do  not  know  what  the 
Empire  would  do  with  a  superabundance  of  money; 
we  had  it  when  the  French  milliards  came  to  us,  and  in 
the  spending  of  it  we  got  ourselves  into  a  certain 
amount  of  perplexity."  The  perplexity  which  Bis- 
marck speaks  of  was  that  the  milliards  were  spent 
rapidly  in  the  building  of  railways,  fortifications,  pub- 
lic works,  and  buildings,  and  gave  an  undue  impetus  to 
industry.  Between  1871  and  1873,  843  new  public 
companies  were  formed  in  Prussia,  more  than  four 
times  the  number  which  had  existed  at  the  formation 
of  the  Empire,  and  by  1877  half  or  more  of  them  had 
gone  into  liquidation.  Directly  when  the  expenditure 
on  state  and  public  works  ceased  stagnation  began ; 
men  found  themselves  in  the  possession  of  works  and 
22 


33^  THE   TARIFF   AND   THE    TRUSTS 

plants  which  had  been  built  or  extended  on  an  exces- 
sive scale  in  order  to  meet  the  temporary  prosperity. 
By  1878  industrial  depression  had  reached  a  climax 
and  thousands  of  laboring  men  were  walking  the 
streets  without  work  and  manufacturers  were  clamor- 
ing for  a  stimulant.  These  are  exactly  the  conditions 
in  which  protective  tariffs  arise.  Again,  united  Ger- 
many had  just  become  a  nation  and  the  cry  of  the 
people  was,  "Let  our  institutions  be  made  truly  na- 
tional ;  let  us  become  independent  economically  as 
well  as  politically ;  let  us  become  a  self-controlled, 
self-supporting  Empire."  These  facts  account  for  the 
popular  demand  for  the  protective  tariff  which  was 
enacted  in  1879. 

Bismarck  was  Chancellor  when  the  reductions  in 
duties  had  occurred  in  1873  and  1875,  and  had  always 
declared  himself  a  free  trader.  On  October  19,  1849, 
speaking  in  the  Prussian  Lower  House,  he  said :  "The 
Deputy  for  Crefeld  regards  the  protective  duty  as  a 
protection  of  the  manufactories  against  foreign  coun- 
tries, while  I,  on  the  other  hand,  regard  it  as  a  pro- 
tection against  the  liberty  of  the  native  population  to 
buy  where  it  may  appear  cheapest  and  most  convenient ; 
in  other  words,  the  protection  of  the  home  country 
against  the  home  country.  Protective  duties  and 
compulsory  guilds  impose  a  sacrifice  upon  the  part  of 
the  population  for  the  benefit  of  the  other  part,  espe- 
cially the  obligation  to  buy  goods  at  a  higher  price  than 


THE   TARIFF    IN    GERMANY  339 

would  Otherwise  be  the  case,  in  order  that  this  other 
part  of  the  population  may  be  ensured  bread  and  be 
protected.  But  protective  duties  have  also  the  disad- 
vantages that  in  the  main  they  only  enrich  a  few  fac- 
tory proprietors.  This  is  their  sole  result,  for  I  have 
never  seen  that  factory  operatives  have  put  away  large 
savings  or  become  rich."  The  Imperial  Constitution 
adopted  in  1871  had  provided,  that  in  so  far  as  the 
expenditures  of  the  Empire  were  not  covered  by  reve- 
nues set  apart  for  its  special  use,  the  deficiencies  should 
be  made  up  by  contributions  from  the  Federal  States 
according  to  population.  These  were  known  as  ma- 
tricular  contributions  and  their  aggregate  amount  was 
fixed  each  year  in  the  Imperial  Budget.  This  depend- 
ence of  the  Empire  upon  aid  from  the  several  states 
was  irritating  to  Bismarck.  He  wished  to  provide 
the  Empire  with  a  sufficient  independent  revenue,  so 
that  it  need  no  longer  rely  on  the  states  and  their  legis- 
latures, and  declared  the  system  unjust  because  based 
upon  population  irrespective  of  considerations  of 
wealth.  On  November  22,  1875,  in  the  Reichstag,  he 
said:  "Speaking  entirely  from  the  standpoint  of  the 
Empire,  I  seek  as  great  a  reduction  as  possible,  if  not 
the  complete  abolition  of  the  matricular  contributions. 
It  is  scarcely  disputed  that  the  form  of  the  matricular 
contributions  is  one  that  does  not  fall  upon  the  con- 
tributary  states  in  proportion  to  their  capacity.  I 
might  say  that  it  is  a  crude  form  which  may  serve  as 


340  THE   TARIFF   AND   THE    TRUSTS 

a  makeshift  so  long  as  we  are  not  aole  to  provide  the 
Empire  in  its  early  youth  with  revenues  of  its  own. 
If,  however,  it  is  acknowledged  that  it  is  a  tax  which 
is  not  just  in  its  incidence,  it  cannot  be  regarded  as  a 
means  of  consolidating  the  Empire."  Again  he  said: 
"The  great  cement  of  a  strong  common  financial  sys- 
tem is  lacking  to  the  Empire  so  long  as  it  is  founded 
only  on  matricular  contributions.  That  these  contri- 
butions fall  unequally  is  a  question  of  justice,  but  to 
diminish  them  is  in  my  opinion  the  task  of  a  well-con- 
sidered Imperial  policy."  And  again  in  the  same 
speech  he  said :  "The  consolidation  of  the  Empire  will 
be  promoted  when  the  matricular  contributions  are  re- 
placed by  Imperial  taxes."  On  May  2,  1879,  advocat- 
ing the  passage  of  the  first  tariff  act  of  the  Empire 
before  the  Reichstag  he  said :  "The  first  motive  which 
impels  me  in  my  political  position  as  Imperial  Chan- 
cellor to  enter  upon  such  a  reform  is  the  need  of  the 
financial  independence  of  the  Empire.  This  need  was 
recognized  when  the  Imperial  Constitution  was  drawn 
up.  That  Constitution  presumes  that  the  system  of 
the  matricular  contributions  should  be  a  temporary 
one  and  should  only  last  until  Imperial  taxes  were 
introduced  .  .  .  We  ask  for  a  moderate  protection  of 
national  labor.  We  are  far  removed  from  any  system 
of  prohibition  such  as  exists  in  most  neighboring  coun- 
tries, as,  for  example,  in  America,  which  was  formerly 
our  principal   buyer,   where   the  duties  average    from 


THE   TARIFF   IN    GERMANY  34I 

60  to  80  per  cent,  ad  valorem."  Not  only  was  Bis- 
marck interested  in  consolidating  the  Empire  and  re- 
moving it  from  dependence  upon  aid  from  the  several 
states,  but  he  desired  to  establish  a  great  army  and 
navy  and  to  make  the  German  Empire  the  most  for- 
midable state  of  Europe.  To  accomplish  that  end, 
the  people  must  be  heavily  taxed,  and  he  was  anxious 
to  extract  the  money  from  the  people's  pockets  without 
their  knowing  that  he  had  taken  it.  The  German 
Empire  was  entirely  free  from  debt  in  the  year  1875. 
To-day  it  has  a  national  debt  of  nearly  a  billion  dol- 
lars, while  the  debts  of  the  Federal  States  have  largely 
increased,  the  aggregate  debt  of  the  Empire  and  the 
states  being  now  close  on  to  four  billion  dollars.  On 
May  21,  1869,  speaking  in  the  Prussian  Diet,  he  said: 
"Direct  taxes  always  press  on  the  taxpayers  with  a 
certain  angular  brutality."  And  on  November  22, 
1875,  speaking  in  the  Reichstag,  he  said :  "I  declare 
myself  as  essentially  favorable  to  the  raising  of  all 
possible  revenue  by  indirect  taxes,  and  I  hold  direct 
taxes  to  be  an  onerous  and  awkward  makeshift.  In- 
direct taxes,  whatever  may  be  said  against  them  theo- 
retically, are,  in  fact,  less  felt.  It  is  difficult  for  the  in- 
dividual to  calculate  how  much  he  pays  and  how  much 
falls  upon  his  neighbor,  but  he  knows  how  much  in- 
come tax  he  pays."  A  little  later  he  said:  "Those 
who  want  to  see  the  electors  dissatisfied  with  govern- 
ment will  hold   fast  to  the   direct  taxes;    those  who 


342  THE   TARIFF    AND   THE   TRUSTS 

seek  to  promote  content  in  the  population  will  be  more 
for  indirect.  That  is  the  result  of  practice  and  ex- 
perience, and  I  need  not  develop  the  sociological 
reason  for  it.  Whoever  ofifers  opposition  wants  to  see 
discontent  amongst  the  people,  and  will  devise  means 
to  find  it  and  to  excite  it  by  representing  the  govern- 
ment as  incapable,  malevolent  and  perhaps  only  as 
clumsy,"  Here  you  have  the  secret  why  the  German 
Empire  adopted  a  different  policy  than  the  Zollverein. 
Here  you  have  the  cry  of  every  ruler  ambitious  to 
consolidate  and  increase  his  power :  "Get  the  money 
out  of  the  people  for  governmental  purposes  without 
their  knowing  it."  Despotic  government  is  almost 
impossible  with  direct  taxation.  Every  revolution  in 
English  and  American  history  has  come  out  of  deter- 
mined opposition  to  an  unjust  direct  tax.  Direct  tax- 
ation is  almost  necessary  to  the  existence  of  free  gov- 
ernment. Vigilance  on  the  part  of  the  people  in 
watching  the  affairs  of  government  is  practically  im- 
possible without  direct  taxation.  Take  their  money 
from  the  people  without  their  knowing  it,  and  by  and 
by  you  can  take  their  liberties  also. 

The  tariff  bill  received  the  Imperial  assent  on  July 
7,  1879,  and  went  into  effect  on  January  i,  1880.  The 
duties  imposed  were  intended  to  be  revenue  producing 
and  not  prohibitive,  and  amounted  upon  the  aggregate 
to  about  20  per  cent.  Many  non-competitive  articles, 
like  coffee,  tea  and  petroleum,  were  singled  out  for 


THE   TARIFF    IN    GERMANY  343 

Special  taxation  on  account  of  their  productiveness  of 
revenue.  Duties  were  imposed  upon  wheat,  rye,  oats, 
barley,  and  other  agricultural  products,  but  the  duties 
compared  with  the  recent  tariff  were  very  low.  Em- 
peror William  was  a  pronounced  protectionist,  and  on 
July  20  he  wrote  to  his  Chancellor  as  follows :  "I  must 
now  congratulate  you  on  the  victory  you  have  gained 
in  the  Reichstag  on  the  question  of  the  customs  tariff 
reform.  To  your  many  outside  victories  must  now  be 
added  this  one  on  internal  financial  questions.  You 
undertook  to  stir  up  a  wasp's  nest,  and  I  sided  with 
you  from  conviction,  although  I  feared  the  result  of 
your  enterprise.  It  is  rare  that  such  a  complete  change 
of  public  opinion  has  been  achieved  in  such  a  short 
time,  and  one  sees  that,  after  immense  work  and  effort, 
you  hit  the  right  nail  on  the  head.  Some  damage  may 
have  been  done  in  the  process,  but  a  majority  of  i6o 
votes  is  a  triumph  which  will  sweeten  many  of  your 
bitter  hours  of  preparation  and  fighting.  The  Father- 
land will  bless  you  for  this ;  although  the  Opposition 
may  not  do  so."  Germany's  return  to  protection 
created  a  general  reaction  among  her  neighbors. 
Russia,  Austria  and  France  increased  their  duties  in 
1881  and  1882. 

Instead  of  the  duties  improving  the  condition  of 
agriculture  by  1885.  the  prices  of  wheat  and  rye  were 
lower  than  they  had  been  for  thirty  years.  ]\Iany  in- 
dustries like  soap  and  perfumery,  the  machine  trades 


344  THE   TARIFF   AND  THE   TRUSTS 

and  the  clothing  trades  had  petitioned  the  government 
to  remove  the  duties  upon  their  raw  materials.  By 
1885  such  depression  had  come  that  industries  again 
appealed  to  the  state  to  protect  them  from  foreign  com- 
petition, and  Prince  Bismarck  prepared  a  bill  that  be- 
came law  revising  the  tariff  in  the  line  of  further  pro- 
tection. Two  years  passed^  and  the  agricultural  party 
again  reminded  the  government  of  its  obligation  to 
protect  agriculture,  and  in  1887  a  further  increase  of 
duties  on  corn  and  live  stock  was  given.  The  wages 
of  the  working  classes  slightly  increased,  but  dearer 
food,  rising  rents,  and  heavier  taxation  counterbalanced 
this,  and  the  actual  condition  of  labor  was  worse  than 
before  1879,  By  1891  a  crisis  was  at  hand,  the  harvest 
had  failed,  the  price  of  corn  rose  to  an  alarming  height, 
the  people  were  hungry,  popular  demonstrations  and 
riots  took  place  in  Berlin,  and  the  larger  cities  of  Ger- 
many, and  the  corn  duties  had  to  be  suspended. 

Bismarck  had  retired  from  office  and  Count  Caprivi, 
an  army  officer,  held  the  office  of  Chancellor,  The 
agrarians,  whose  political  activity  had  brought  about 
the  tariffs  of  1885  and  1887,  regarded  Caprivi  as  out 
of  sympathy  with  their  desires.  He  was  neither  rich 
nor  a  landowner,  and  during  his  administration  they 
fought  him  step  by  step,  and  finally  forced  the  Emperor 
to  remove  him.  Caprivi  believed  that  Germany  had 
brought  about  her  commercial  isolation  by  her  tariffs, 
and  he  proposed  to  return  to  the  policy  of  lower  duties 


THE   TARIFF   IN    GERMANY  345 

by  commercial  treaties  with  foreign  countries,  as  the 
existing  tariffs  were  about  to  expire.  Russia,  Italy, 
Switzerland,  and  Spain  had  notified  Germany  of  their 
intention  to  increase  their  tariffs,  and  Caprivi  averted 
this  by  negotiating  treaties.  In  December,  1891,  the 
Chancellor  laid  before  the  Reichstag  a  series  of  treaties 
with  Austria- Hungary,  Italy,  Switzerland,  and  Belgium 
intended  to  come  into  force  February  i,  1892,  and  to 
last  until  December  31,  1903.  These  treaties  fixed  the 
duties  in  each  country  for  a  period  of  twelve  years, 
making  mutual  concessions  to  the  extent  of  admitting 
many  articles  free.  Germany  subsequently  negotiated 
treaties  with  Rumania,  Servia,  Nicaragua,  Japan,  and 
Spain ;  but  France  and  Russia,  with  some  of  the  smal- 
ler states,  adhered  to  the  policy  of  customs  autonomy. 
Russia  in  1891  had  enacted  a  highly  protective  tariff, 
which  bore  with  special  severity  upon  Germany. 
Caprivi  was  willing  to  enter  into  a  treaty  with  Russia 
reducing  the  duties  on  foodstuffs,  but  only  on  the  con- 
dition that  Russia  sliould  in  return  lower  the  duties 
on  German  industrial  products.  Negotiations  were 
carried  on  for  some  time,  but  no  agreement  could  be 
reached  and  Russia  announced  by  Imperial  order  her 
intention  of  enforcing  her  maximum  tariff  against 
Germany.  The  German  government  resorted  to  re- 
taliation, and  not  only  enforced  their  maximum  tariff, 
but  increased  the  duties  imposed  on  Russian  goods  by 
50  per  cent.     Immediately  the  Russian  authorities  re- 


346  THE   TARIFF    AND   THE    TRUSTS 

plied  by  increasing  their  maximum  tariff  by  50  per 
cent,  against  German  goods  and  increasing  the  dues 
payable  by  German  shipping  in  Russian  ports.  A 
tariff  war  between  these  two  countries  was  on,  and  it 
lasted  from  August  i,  1893,  to  March  20,  1894.  Then 
negotiations  were  taken  up,  and  Russia  lowered  her 
tariffs  on  120  articles  in  the  importation  of  which 
Germany  was  interested,  while  she  secured  in  return 
lower  duties  for  her  grain  exports  to  Germany,  although 
the  German  agrarians  fought  with  all  their  power  to 
continue  the  war. 

Our  relations  with  Germany  during  the  period  be- 
tween 1891  and  the  new  tariff  of  1903  were  controlled 
by  the  treaty  with  Prussia  of  May  i,  1828,  and  later  by 
the  convention  of  the  loth  of  July,  1900,  by  which  we 
extended  to  Germany  the  concessions  yielded  to  France, 
Italy,  and  Portugal  and  in  return  received  tke  advantage 
of  the  German  conventional  or  minimum  tariff.  In 
making  these  tariff  treaties  the  German  government 
had  in  their  own  words  "declined  to  consult  the  various 
industries  concerned,  believing  that  in  not  obtaining 
the  advice  of  interested  parties  they  would  be  less 
biased  than  they  might  otherwise  have  been."  How 
different  this  from  our  methods  of  making  a  tariff. 
We  not  only  consult  the  manufacturers  exclusively, 
but  our  Congressmen  allow  them  practically  to  write 
the  schedules.  Everybody  is  given  all  they  ask  for, 
especially  if  they  have  contributed  freely  to  the  national 


THE   TARIFF    IN    GERMANY  347 

campaign  fund  of  the  successful  party.  Such  a 
thought  on  the  part  of  Congressmen  as  the  propriety  of 
obtaining  expert  knowledge  from  disinterested  sources, 
instead  of  consulting  the  very  men  who  are  to  be  al- 
lowed by  the  duties  to  increase  their  prices  to  the 
American  people,  is  unknown  for  the  last  thirty  years. 
The  Emperor,  in  recognition  of  the  success  of 
Caprivi  in  making  these  treaties,  conferred  the  title  of 
Count  upon  him,  and  wrote  of  him  as  follows :  "That 
simple,  homely  Prussian  General  has  in  two  years  suc- 
ceeded in  making  himself  conversant  with  and  in  mas- 
tering problems  of  extreme  difficulty,  with  a  rare  polit- 
ical insight.  He  has,  at  the  right  moment,  saved  the 
Fatherland  from  evil  consequences.  I  believe  that  the 
achievement  represented  by  the  introduction  and  con- 
clusion of  the  treaties  of  commerce  will  prove  for 
posterity  one  of  the  most  important  historical  events, 
and  is  literally  an  act  of  vital  moment.  I  am  convinced 
that  not  only  our  Fatherland,  but  millions  of  the  sub- 
jects of  other  countries  which  are  united  to  us  in  the 
great  Customs  League,  will  sooner  or  later  bless  this 
day."  Notwithstanding  these  kind  words  from  the 
Emperor,  the  agrarians  had  sufficient  power  with  him 
to  force  Caprivi  from  office  and  place  in  his  stead 
Prince  von  Hohenlohe-Schillingsfiirst,  one  of  the  larg- 
est landed  proprietors  in  the  Empire  and  one  of  the 
leaders  of  Agrarianism.  During  the  continuance  of 
the  treaties  Germany  was  especially  prosperous.     For 


348  THE   TARIFF    AND   THE    TRUSTS 

a  period  of  six  years  after  the  treaties  came  into  effect 
her  exports  increased  by  tens  of  millions  yearly.  The 
Berlin  Merchants'  Association  said  in  1896:  "It  must 
be  conceded  that  the  treaties  certainly  have  had  those 
favorable  consequences  for  Germany's  export  trade 
which  impartial  judges  predicted  would  result  from 
them.  In  fact  the  commercial  and  industrial  activity 
which  has  been  so  apparent  in  Germany  since  1894  is 
directly  due  to  these  treaties."  Professor  Lujo 
Brentano,  writing  in  1902  of  the  effect  of  the  com- 
mercial treaties,  said :  "In  fact,  since  the  conclusion  of 
the  Caprivi  commercial  treaties,  the  wealth  of  Germany 
has  increased  as  in  no  equal  period  of  its  long  history 
before ;  the  population  has  rapidly  grown ;  emigration 
has  fallen  to  a  figure  unknown  in  the  history  of  the 
whole  nineteenth  century,  and  other  nations,  full  of 
astonishment,  envy  us  this." 

We  have  now  reached  a  point  of  German  history 
which  immediately  concerns  the  people  of  the  United 
States,  and  that  is  the  von  Biilow  Tariff,  which  went 
into  effect  on  the  ist  day  of  March  last,  the  effect  of 
which  is  suspended  as  to  the  United  States  for  one 
year.  That  tariff  is  the  direct  result  of  the  agitation 
of  the  agrarians,  and  we  cannot  understand  the  situa- 
tion without  knowing  who  they  are,  what  objects  they 
have  in  view  and  how  they  accomplish  their  ends. 
Their  leaders  are  the  great  landowners  of  Prussia  and 
Germany.     In  round  numbers  25,000  large  landowners 


THE   TARIFF    IN    GERMANY  349 

divide  between  themselves  one-fourth  of  the  land  of 
the  whole  German  Empire,  then  come  281,000  large 
peasant  proprietors  owning  together  one-third,  mak- 
ing 306,000  persons  owning  fifty-four  per  cent,  of  the 
soil  of  the  country.  The  remaining  part  of  Prussia 
and  the  German  Empire  are  owned  by  5,250,000  small 
cultivators  who  own  the  land  divided  into  small  farms 
averaging  not  to  exceed  five  acres,  barely  sufficient  to 
raise  grain  for  the  support  of  themselves  and  their 
families.  Thus  the  Agrarian  Party  has  about  300,000 
large  landowners  who  are  benefited  by  high  protective 
duties  upon  grain.  Many  of  these  men  are  members 
of  the  Conservative  or  National  Liberal  party  and  have 
seats  in  the  Council  or  the  Reichstag,  and,  having  but 
one  object  in  view,  namely  to  secure  benefits  for  them- 
selves, by  throwing  all  other  considerations  aside,  they 
have  made  themselves  the  dominating  power  of  the 
German  government.  Apart  from  the  will  of  the 
Kaiser  and  the  Federal  Council,  Germany  can  neither 
make  nor  unmake  a  law.  At  the  same  time,  without 
the  consent  of  the  Reichstag,  no  statute  can  be  passed. 
The  agrarians  are  willing  to  vote  for  any  legislation 
which  the  Emperor  desires  if  he  in  return  will  permit 
them  to  dictate  the  tariff  upon  agricultural  products. 
The  result  is  that  the  government  has  to  purchase 
their  support  at  the  cost  of  the  people  in  exactly  the 
same  way  that  political  parties  in  this  country  purchase 
the  support  of  the  captains  of  industry  at  the  expense 


3SO  THE    TARIFF    AND   THE    TRUSTS 

of  our  people.  So  thoroughly  bigoted  are  the  agra- 
rians, so  solely  have  they  only  their  own  interests  in 
view,  so  indifferent  are  they  to  the  welfare  of  their 
country,  that  when  the  government  a  few  years  ago, 
perceiving  that  a  system  of  canals  from  the  Rhine  to 
the  Elbe  would  facilitate  the  carriage  of  produce  from 
one  side  of  the  country  to  the  other,  sought  to  pass  a 
law  through  the  Prussian  Landtag  authorizing  the 
construction  of  such  a  system,  the  agrarian  landowners 
of  Prussia  defeated  the  law  upon  the  ground  that  the 
carriage  of  American  grain  into  the  interior  would 
neutralize  the  effect  of  the  duties  on  grain.  One  of 
the  leaders  of  these  agrarian  junkers  is  Count  Kanitz, 
an  East  Prussian  nobleman  and  a  type  of  the  whole 
junker  class.  On  April  7,  1894,  he  proposed  the  pas- 
sage of  a  law  in  the  Reichstag  directing  that  the  state 
should  purchase  outright  all  the  corn  imported  into  the 
country  and  retail  it  at  prices  which  should  not  be  be- 
low a  favorable  average  of  past  years,  the  idea  being 
that  the  market  price  of  corn  thus  sold  out  of  the  pub- 
lic granaries  would  determine  the  price  of  the  entire 
amount  of  grain  produced  at  home.  Prince  Hohenlohe, 
the  Chancellor,  himself  an  agrarian,  declared  that  he 
would  not  countenance  such  a  dangerous  step  towards 
socialism,  and  to  this  statement  Bebel,  the  Social  Demo- 
cratic leader  in  the  Reichstag,  retorted  that  to  enrich 
a  single  class  at  the  expense  of  the  community  was  not 
socialism,  that  socialism  proposed  that  the  government 


THE   TARIFF    IN    GERMANY  35 1 

should  own  all  property  for  the  benefit  of  all.  The 
Agrarian  Party  has  a  large  membership,  raises  con- 
siderable sums  of  money  for  carrying  on  its  work  and 
supports  a  large  staff  of  itinerant  lecturers  whose  busi- 
ness it  is  to  organize  the  agricultural  classes,  to  instruct 
them  as  to  the  grievances  of  the  landowners,  to  marshal 
them  at  election,  and  to  see  that  they  vote  for  agrarian 
candidates.  The  agrarians  are  most  useful  to  the 
Emperor  in  his  struggle  with  the  socialists,  carrying 
on  in  his  behalf  an  active  campaign  against  socialism. 
In  1900  an  unpleasant  incident,  which  seemed  quite  like 
the  conditions  in  our  own  country,  brought  out  in 
strong  light  the  danger  of  an  alliance  between  the  gov- 
ernment and  a  protected  interest.  A  high  official  of  the 
Imperial  Home  Office  was  proved  to  have  accepted  a 
contribution  of  $3,000  from  the  Central  Association  of 
German  Industrialists  for  use  in  the  promotion  of  anti- 
socialistic  measures.  When  that  official  was  interro- 
gated in  the  Reichstag  he  acknowledged  the  truth  of  the 
allegation  and  accepted  responsibility  for  the  act  of  his 
subordinate.  In  1900  the  agrarians  found  the  Emperor 
at  their  mercy  when  the  bill  for  an  enlarged  navy  was 
introduced  in  the  Reichstag,  and  they  gave  him  the 
choice  of  abandoning  any  increase  in  the  navy  or  com- 
mitting the  Empire  to  the  policy  of  protection  run  mad. 
The  Emperor,  to  save  his  army  and  navy,  surrendered 
to  the  army  of  agrarians.  The  result  was  that  when 
Count  von  Bulow  became  Chancellor  in  October,  1900, 


352  THE   TARIFF    AND   THE   TRUSTS 

with  the  fate  of  Caprivi  to  warn  him,  he  capitulated 
before  a  crusade  of  the  agrarians  and  consented  to  the 
tariff  of  1903,  the  maximum  duties  of  which  are,  after 
those  of  Russia,  the  highest  in  Europe.  This  tariff 
was  brought  about  in  this  way:  The  agrarians  are 
represented  largely  among  the  Conservatives,  the  Free 
Conservatives,  the  National  Liberals,  and  the  Anti- 
Semites,  four  of  the  ten  parties  in  the  German  Reich- 
stag, and  being  willing  to  grant  anything  to  these  or  to 
any  other  party  in  the  Reichstag  if  they  can  attain  their 
own  ends,  they  have  become  all-powerful.  When  a 
new  tariff  was  determined  upon  in  1900,  they  invited 
in  the  representatives  of  manufacturing  and  said  to 
them :  "You  may  have  any  duties  you  desire,  but  in 
return  you  must  give  us  such  duties  on  our  products 
as  our  interests  require.  Give  us  so  much  duty  upon 
wheat  and  rye,  and  we  will  give  you  as  much  as  you 
wish  upon  iron.  Give  us  so  much  upon  beef  and  pork, 
and  we  will  give  you  so  much  upon  woolen  and  cotton." 
In  this  manner,  which  we  understand  thoroughly  in  the 
United  States,  the  recent  tariff  was  made.  This  tariff 
consists  of  what  is  known  as  a  general  tariff  and  a  con- 
ventional tariff.  The  highest  duties  are  found  in  the 
"general  tariff,"  and  are  intended  to  be  used  as  a  club 
to  compel  foreign  countries  to  enter  into  commercial 
treaties  with  Germany,  reducing  their  own  duties ;  in 
case  they  do  so  sufficiently  to  satisfy  the  German  gov- 
ernment,  it  gives  them   the   advantage   of  the   lower 


THE   TARIFF   IN    GERMANY  353 

duties  known  as  the  conventional  tariff.  The  "general 
tariff"  of  Germany  increases  the  prior  duties  on  wheat 
114  per  cent.,  flour  156  per  cent.,  maize  212  per  cent., 
wood  25  per  cent.,  lard  25  per  cent.,  bacon  80  per  cent.. 
pork  176  per  cent.,  beef  200  per  cent.,  rye  70  per  cent., 
barley  100  per  cent.,  oats  115  per  cent.  The  duty  on 
saccharine  has  been  increased  to  8000  marks  per  100 
kilos.  Agricultural  machinery  has  been  increased  88 
per  cent.,  and  so  the  increase  of  duties  runs  through  all 
the  products  of  agriculture,  with  a  smaller  increase  up- 
on manufactures.  These  duties  are  as  monstrous  as 
those  of  the  Dingley  Bill,  and  have  been  brought  about 
in  the  same  manner.  Such  high  duties  would  be  of  no 
value  to  our  farmers  because  they  export  about  one- 
third  of  their  entire  product ;  but  the  German  land- 
owners do  not  produce  wheat  and  other  grains  suffi- 
cient to  meet  the  home  consumption,  and  the  result  of 
their  high  tariff  is  the  same  as  the  result  of  our  tariff 
upon  manufactured  products  with  trusts  existing  to 
make  it  effectual.  It  simply  raises  the  price  of  the 
home  product  up  to  the  duty  line. 

The  manner  in  which  this  tariff  was  eventually  passed 
IS  worthy  of  attention.  Every  careful  observer  of  the 
trend  and  current  of  legislation  in  this  country  has 
seen  with  apprehension  the  changed  methods  of  enact- 
ing laws.  Thirty  years  ago  public  measures  were 
carefully  prepared  and  thoroughly  discussed  before 
they  were  passed.  Discussion  on  the  part  of  leading 
23 


354  THE    TARIFF    AND   THE    TRUSTS 

members  in  Congress  then  availed  something,  because 
it  changed  men's  opinions  and  votes ;  but  that  time  has 
passed.  The  party  leader  now  marshals  his  party 
with  military  tactics  and  if  a  bill  is  especially  bad,  he 
jams  it  through  without  allowing  discussion.  In  just 
this  manner  the  German  tariff  was  passed.  There 
were  700  odd  duties  affecting  manufacturing  and 
agricultural  products  in  the  German  tariff  bill,  and 
after  it  had  been  reported  by  the  committee  a  combina- 
tion of  Clerical,  Conservative  and  National  Liberal 
members,  without  permitting  any  discussion,  moved 
the  passage  of  the  bill,  and,  in  our  American  phrase, 
"jammed  it  through."  Of  this  tariff"  the  Commercial 
Treaties  Association,  consisting  of  20,000  members, 
its  membership  employing  1,500,000  men  and  represent- 
ing the  industries  of  the  whole  German  Empire,  say : 
"The  parties  composing  the  majority  in  the  Reichstag 
"have  unfortunately  succeeded  in  securing  the  adoption 
"of  the  customs  tariff,  which  has  been  altered  for  the 
"worse  by  the  amendments  of  the  committee.  The 
"Commercial  Treaties  Association  consider  it  to  be  all 
"the  more  incumbent  on  them  to  persevere  in  the  task 
"of  endeavoring,  by  spreading  information  among  the 
"people,  to  ensure  that  in  the  future  German  commer- 
"cial  policy  shall,  in  view  of  the  greedy  appetite  of  the 
"agrarians,  be  guided  into  moderate  courses,  and  that, 
"as  a  first  step,  the  result  of  the  elections  may  furnish 
"a  prospect  of  the  reduction  of  the  exorbitant  duties 


THE    TARIFF    IN    GERMANY  355 

"of  the  tariff,  which  are  greatly  to  the  prejudice  of  the 
''internal  economic  conditions  of  Germany ;  the  Com- 
"mercial  Treaties  Association  will  now,  as  before,  con- 
"stantly  endeavor  by  their  active  co-operation  to  pro- 
"mote  the  conclusion  of  advantageous  commercial 
"treaties  for  long  periods  of  time  in  the  interest  of  the 
"overwhelming  majority  of  the  German  people." 

The  result  of  this  recent  German  tariff  has  been  that 
Russia,  Austria,  and  Switzerland,  in  answer  to  it  have 
revised  their  own  tariffs,  and  increased  the  duties  in 
all  points  that  affected  German  trade.  Other  European 
countries  have  increased  their  tariffs,  and  the  result  is 
that  German  industries,  both  for  the  purpose  of  pro- 
curing their  raw  material  cheaper  and  for  the  purpose 
of  introducing  their  manufactured  articles  into  other 
countries  without  the  payment  of  duties,  have  found  it 
necessary  to  establish  branches  abroad.  Dr.  Eugen 
IMoritz,  in  his  work  "Eisenindustrie,  Zolltariff  und 
Aussenhanddel,"  enumerates  7  large  iron  works  which 
have  established  as  many  branches  in  foreign  countries : 
16  machine  works  which  have  established  26  branches ; 
7  electrical  companies  which  have  established  20 
branches  ;  7  textile  companies  which  have  established  10 
branches;  9  chemical  works  which  have  established  16 
branches ;  and  6  glass,  cement  and  other  companies 
which  have  established  9  branches.  All  the  industries 
of  Germany  have  gone  into  the  hands  of  syndicates 
which  regulate  both   the  production   and  the  sale  of 


356  THE    TARIFF    AND    THE    TRUSTS 

hundreds  of  different  plants.  These  are  required  to 
transact  business  entirely  through  the  mediation  of  the 
syndicate  and  to  conform  to  the  regulations  which  are 
issued  in  the  common  interest  by  its  officials.  Among 
these  is  the  Steel  Works  Association,  formed  in  1904, 
which  has  entire  control  of  the  domestic  sales  and  ex- 
ports of  all  the  iron  and  steel  in  the  German  Empire. 
The  objects  of  this  Association  are  to  maintain  a  uni- 
form price  list  in  the  home  market,  generally  as  high 
as  the  duty  will  allow,  and  to  prevent  a  reckless  cutting 
of  quotations  abroad.  All  domestic  competition  is  in 
this  way  destroyed,  and  the  syndicates  are  able  to  sell 
products  which  they  control  at  a  price  just  below  the 
tariff  duty  line  of  importation.  These  syndicates  in- 
terrupt all  connection  between  the  manufacturer  and 
the  customer,  and  the  result  is  that  if  the  manufacturer 
quits  the  syndicate,  he  finds  himself  compelled  to  be- 
gin all  over  again.  The  effect  is  that  the  home  pur- 
chaser is  charged  the  largest  amount  which  the  tariff 
will  allow,  while  the  foreigner  purchases  German  ex- 
ports in  his  own  market  at  low  prices.  In  Germany 
no  disguise  is  made  of  the  fact  that  very  cheap  selling 
in  foreign  countries  is  only  made  possible  by  dearer 
selling  at  home. 

Bismarck's  idea  in  giving  the  landowners  high  duties 
upon  their  products  was  to  induce  laboring  men  in  in- 
creasing numbers  to  work  upon  the  farms  and  thus 
stamp  out  the  socialism  of  the  cities.     He  called  the 


THE   TARIFF    IN    GERMANY  357 

agricultural  interests  the  stable  element  that  would  act 
as  a  counterpoise  to  the  floating  population  of  the 
towns  which  furnished  the  socialist  members  in  the 
Reichstag.  But  the  result  has  been  directly  the  oppo- 
site from  what  he  expected.  The  rural  population  in 
1871  was  64  per  cent,  of  the  people  and  the  urban  pop- 
ulation 36  per  cent.  Now  the  urban  population  is 
more  than  54  per  cent,  and  the  rural  population  46  per 
cent. 

The  results  of  protection  in  Germany,  if  measured  by 
the  condition  of  agriculture  and  the  condition  of  labor- 
ing men  in  the  factories  and  upon  the  farms,  is  any- 
thing but  assuring.  Between  1871  and  1895  the  agri- 
cultural population  of  Germany  increased  one  per  cent., 
while  the  industrial  population  increased  fifty-seven 
per  cent,  and  the  commercial  population  sixty-seven 
per  cent.  The  large  landowner  seldom  follows  agri- 
culture as  a  calling,  and  lives  the  leisurely  life  of  a 
nobleman  or  politician.  The  system  of  large  ill-man- 
aged estates  has  been  handed  down  in  Germany  from 
feudal  times.  The  landowner's  estate  is  generally 
mortgaged  to  the  full  extent  which  he  can  ^procure 
thereon.  Protected  by  high  duties,  he  is  lulled  into  a 
condition  of  apathy  and  indolence.  It  having  been  ad- 
mitted that  it  is  the  duty  of  the  state  to  protect  agri- 
culture, it  is  unnecessary  for  him  to  resort  to  improved 
methods  of  farming  or  to  exhibit  enterprise  in  his 
work.     The  idea  of  self-help  has  been  sapped  out.     The 


358  THE    TARIFF    AND    THE    TRUSTS 

state  having  assumed  responsibility  for  making  his 
business  pay,  it  is  hardly  necessary  for  him  to  continue 
to  shoulder  the  burden  himself.  It  results  from  this 
condition  that  what  is  known  as  intensive  farming 
does  not  exist  to  any  considerable  extent  upon  the  large 
estates  of  Germany.  Antiquated  machinery  and  anti- 
quated methods  prevail  and  the  great  landowners  are 
the  most  backward  of  all  Europe  outside  Russia.  The 
condition  of  the  laboring  men,  both  in  cities  and  upon 
the  farm,  is  simply  terrible.  Mr.  Andrew  D.  White, 
our  former  Ambassador  to  Berlin,  gives  this  descrip- 
tion of  the  German  laboring  classes :  "The  food  of  the 
poorer  classes  in  Germany  is  wretched;  in  many  of  tlie 
great  industrial  centers  human  beings  live  like  animals. 
The  condition  of  the  peasants  in  Prussia,  Silesia  and 
Thuringia  is  fearful.  This  terrible  misery  is  hidden  by 
the  humanitarian  political  institutions  which  deceive 
the  superficial  foreign  inquirer,  but  they  are  the  merest 
disguise  for  the  all-directing  state,  and  already  falling 
into  ruins."  The  laboring  classes  upon  the  great  es- 
tates are  in  a  condition  hardly  to  be  distinguished  from 
the  serfs  of  a  hundred  years  ago.  In  the  great  estates 
in  the  north  and  northeast  of  Prussia,  in  Pomerania 
and  the  Mecklenburgs  the  daily  wage  of  an  average 
laborer  is  about  20  cents  a  day  the  year  round.  In 
upper  Silesia  it  is  said  there  are  hundreds  of  farm 
laborers  who  only  receive  from  12  to  14  cents  a  day. 
The  custom  is  to  give  the  farm  laborer  the  use  of  a 


THE   TARIFF    IN    GERMANY  359 

house  and  a  small  piece  of  land  for  tillage.  A  Berlin 
journal  describes  the  homes  of  the  east  Prussian  farm 
laborers  as  follows :  "The  houses  are  small  and  dilapi- 
"dated,  and  the  walls  falling  in  through  age,  being 
"built  in  a  very  primitive  manner  of  clay  and  wood. 
"The  owner  hardly  does  anything  at  all  in  the  way  of 
"repairs;  the  laborers  themselves  have  to  do  all  the 
"necessary  patching.  No  wonder,  therefore,  that  the 
"wind  whistles  unhindered  through  every  niche  and 
"cranny,  and  that  rain  and  snow  sweep  through  the 
"rent  roof  of  straw.  For  each  family  there  is  but  one 
"small,  narrow  living  room,  with  a  bedroom  and  a 
"little  lumber  room.  The  floor  is  of  clay,  uneven  and 
"full  of  holes;  a  floor  of  brick  is  regarded  as  a  luxury. 
"The  rifts  in  the  walls  are  stopped  up  with  rags,  pieces 
"of  turf,  etc. ;  the  windows  have  long  been  broken,  and 
"the  holes  are  either  covered  with  paper  or  are  filled 
"with  rags,  moss,  or  wasps  of  straw.  The  internal  ar- 
"rangements  correspond — a  couple  of  rickety  chairs, 
"a  table,  the  indispensable  'settle,'  and  the  clumsy  bed- 
"steads.  The  limited  space  is  naturally  insufficient  to 
"afiford  to  the  inmates  sleeping  accommodation  suited 
"either  to  rational  or  moral  ideas,  especially  where 
"there  is  a  large  family.  Should  there  be  a  lodger,  and 
"he  has  to  sleep  on  the  floor  perhaps  with  hens  for 
"company,  he  must  not  be  surprised  if  the  rain  trickles 
"down  upon  his  head  or  the  snow  drifts  an  inch  thick 
"upon    his    bed-cover.     When    the    frugal    meals    are 


360  THE   TARIFF    AND   THE    TRUSTS 

"being  eaten  it  is  no  rare  thing  for  sand  and  pieces  of 
"earth  to  fall  through  the  holes  in  the  rude  plank  ceil- 
"ing  if  the  hens  should  be  scratching  above.  It  is  by 
"the  provision  of  'free  dwellings'  of  this  kind  that  the 
"landowners  manifest  their  much-vaunted  solicitude 
"for  their  laborers.  In  reality,  the  pigstyes  of  the 
"agrarians  east  of  the  Elbe  are  far  better  fitted  up  than 
"the  miserable  huts  of  the  day  laborers."  The  farm 
laborer,  working  for  twelve,  thirteen  and  fourteen  hours 
a  day,  receives  less  than  half  the  amount  which  the  Eng- 
lish farm  laborer  is  receiving,  while  the  average  pay  of 
the  operatives  in  the  factories  is  about  two-thirds  of  the 
average  pay  of  operatives  in  the  factories  of  England. 
The  operatives  in  the  German  factories  while  receiving 
much  less  pay  for  a  day's  labor  than  the  English  opera- 
tives are  mulcted  in  extra  cost  for  all  the  necessaries  of 
life  in  much  the  same  way  as  the  operatives  in  the 
American  factories.  During  the  last  year  or  two  the 
price  of  meat  in  Germany  has  gone  up  so  rapidly  that 
thousands  of  the  laboring  people  are  unable  to  purchase 
it.  The  Berlin  Tageblatt  recently  said  that  a  beef  steer 
which  cost  $32.45  in  Berlin  in  July,  1904,  cost  $34.40 
in  July,  1905,  and  $36.87  in  July  of  the  present  year. 
In  September  last  the  price  had  risen  to  $41.75.  The 
price  of  other  meats  has  gone  up  in  the  same  ratio, 
and  the  government,  in  league  with  the  agrarians,  seems 
to  be  doing  everything  it  can  to  make  the  cost  of  liv- 
ing so  high  that  the  operatives  in  the  German  factories 


THE   TARIFF   IN    GERMANY  361 

cannot  enjoy  the  common  necessaries  of  life.     In  1904 
the  government  practically  prohibited  the  importation 
of  American  hogs,  and  in  the  same  year  forbade  the 
importation  of  hogs  from  Belgium,  Holland  and  Eng- 
land.    In  1895  it  stopped  the  importation  of  pork  from 
Denmark.     In  1900  it  prohibited  all  imports  of  sausages 
and  canned  meats,  and  stringent  regulations  against  the 
importation  of  cattle  on  hoof  have  recently  been  en- 
acted.    The  result  is  that  the  German  operatives  and 
farm  laborers  know  little  of  the  comforts  enjoyed  by 
the  English  and  the  American  laboring  man.     In  about 
every  German  city  you  will  find  markets  for  the  sale  of 
horseflesh,  and  it  is  largely  eaten  by  the  laboring  class- 
es.    Our  American  farmers  will  never  have  reason  to 
fear  competition  with  the  farmers  of  the  German  Em- 
pire.    A  German  critic  well  describes  the  great  German 
landowners   in  the    following   language :   "Instead   of 
"meeting  foreign  competition,  helped  as  it  is  by  the  use 
"of  the  most  advanced  technical  improvements  and  by 
"the  intelligent  management  of  the  estates,  the  Junkers 
"fall  back,  with  lamentation,  upon  the  support  of  the 
"State  in  the  form  of  protective  duties  and  export  pre- 
"miums ;  and  instead  of  paying  and  treating  their  labor- 
"ers  decently,  training  them  to  greater  productivity,  and 
"interesting  them  in  their  work,  they  do  exactly  the  op- 
"posite,  and  build  their  expectations  upon  reactionary 
"coercive  measures  \vhich  shall  bring  the  laboring  men 
"still  further  under  their  heel.     A  well-paid  energetic 


362  THE   TARIFF    AND   THE   TRUSTS 

"laboring  class  would  at  once  put  an  end  to  the  labor 
"problem  on  the  land,  not  simply  because  it  would  be 
"able  to  work  in  general  more  efficiently  than  the  pres- 
"ent  exhausted  helots,  but  because  it  would  facilitate 
"the  extended  use  of  machinery,  now  comparatively 
"little  employed  in  agricultural  operations.  At  present 
"it  is  naturally  difficult  to  procure  good  and  capable 
"laborers  for  this  machinery,  but  the  blame  rests  en- 
"tirely  with  the  large  proprietors,  and  particularly  with 
"the  Junkers,  who  have  done  everything  they  could  to 
"make  it  impossible  for  intelligent  workmen  to  live  on 
"the  land." 

The  chemical  industry  in  Germany  is  worthy  of  at- 
tention. For  many  years  the  great  chemical  plants 
have  had  in  their  employ  the  professors  of  chemistry  in 
the  different  universities.  In  no  other  line  have  German 
patience  and  thoroughness  been  rewarded  by  such  great 
industrial  results.  These  professors  not  only  have 
made  important  discoveries  themselves,  but  have  de- 
veloped into  practical  results  the  discoveries  of  the 
English  chemists.  The  present  annual  value  of 
Germany's  chemical  products  is  upwards  of  $300,000,- 
000.  During  the  last  fourteen  years  her  imports  of 
chemicals  have  been  stationary,  but  her  exports  have 
more  than  doubled,  amounting  to  considerably  above 
$100,000,000. 

The  protectionists  of  Germany  no  longer  ask  pro- 
tection for  the  purpose  of  cultivating  new  or  young 


THE   TARIFF    IN    GERMANY  363 

branches  of  industry,  but,  without  disguise,  they  de- 
mand a  state  guarantee  by  means  of  customs  duties  to 
procure  a  definite  interest  upon  their  capital  and  rent 
of  land.  They  do  not  seek,  by  means  of  labor-saving 
machinery  and  the  payment  of  good  prices  to  intelli- 
gent labor,  to  furnish  the  products  of  the  farm  in 
abundance  and  cheaply ;  they  do  not  resort  to  the  in- 
tensive system  of  farming ;  but  they  ask  the  state  to 
come  in  and  maintain  the  rent  of  their  land  and  their 
rate  of  interest,  and  thus  practically  they  establish  state 
socialism  as  an  example  to  the  millions  of  laboring  men 
in  the  factories  of  the  towns  and  cities.  Is  it  any 
wonder  that  socialism  grows  rapidly  in  Germany,  that 
it  already  casts  3,000,000  of  votes,  that  it  has  a  large 
representation  in  the  Reichstag  and  a  majority  of  the 
voters  in  about  all  of  the  German  cities,  if  not,  by  rea- 
son of  the  cumulative  voting,  a  majority  of  the  votes? 
Mr.  Dawson,  in  his  excellent  work  "Protection  in 
Germany"  says :  "The  word  [socialism]  is  like  poison 
"on  the  tongue  of  the  average  Protectionist,  wdiether 
"agrarian  or  industrialist,  yet  in  effect  his  demand  im- 
"plicitly  concedes  the  Communistic  principle.  For  if 
"the  landowner  is  to  be  secured  his  rent,  and  the  cap- 
"italist  his  interest,  why  not  the  merchant  his  profits, 
"the  workman  his  wages,  the  professional  man  his  fees, 
"and  everybody  else  his  special  form  of  remuneration? 
"But  a  system  of  universal  bounties,  under  which  every- 
"body  is  equally  subsidized  at  the  common  expense — 


364  THE    TARIFF    AND   THE    TRUSTS 

"which  means  in  the  last  resort  his  own — would  be 
"nothing  less  than  Communism  sans  phrase.  That 
"was  why  Count  von  Caprivi  with  statesmanlike  fore- 
"sight  ranked  agrarianism  with  Social  Democracy  as 
"one  of  the 'revolutionary  elements  of  society." 

Germany  came  forth  from  the  war  of  France  with  a 
sense  of  strength  and  confidence.  That  feeling  has 
communicated  itself  to  the  field  of  manufacturing,  and 
in  the  exports  of  manufactured  products  she  stands 
next  to  Great  Britain.  She  has  shown  great  vigor, 
enterprise,  and  ability  in  the  prosecution  of  industries. 
But,  to  secure  success,  she  must  find  vent  for  her  manu- 
factures. Can  she  lead  in  the  world's  industries  while 
she  attempts  to  shut  out  the  imports  of  grain  and  food 
from  other  countries  ? 

It  is  apparent  that  the  conditions  in  Germany  to-day 
are  almost  identical  with  the  conditions  in  England  be- 
fore the  repeal  of  the  Corn  Laws,  and  Cobdcn's  argu- 
ments would  apply  equally  as  well  as  to  England  in 
1840.  Germany's  great  landowners  practically  govern 
Germany.  They  have  voted  to  themselves  high  cus- 
toms duties  against  the  importation  of  all  like  products 
to  their  own.  They  have  formed  themselves  into  a 
vigorous  fighting  organization,  and  demand  that  agri- 
culture shall  be  regarded  by  the  state  as  its  primary 
concern  and  shall  be  given  preference  over  every  other 
interest.  The  cost  of  living  has  been  greatly  increased. 
Terrible  burdens  are  thus  placed  upon  the  poorly  paid 


THE   TARIFF    IN    GERMANY  365 

factory  operatives,  and  the  agricultural  laborers  are  in 
a  condition  little  better  than  serfage.  The  shutting  out 
of  foreign  agricultural  products  by  reason  of  the  high 
tariff  and  the  consequent  high  prices  of  food  affect 
manufacturing  in  precisely  the  same  manner  as  the 
Corn  Laws  in  England  affected  manufacturing  in  the 
forties.  Will  not  the  manufacturers  soon  appreciate 
this?  Will  Germany  produce  a  Cobden  or  a  Bright 
to  lead  the  battle  against  the  agrarians?  Is  the  spirit 
which  achieved  the  repeal  of  the  Corn  Laws  living 
among  the  German  manufacturers  and  the  German 
workmen?  In  their  very  selfishness  will  not  the 
agrarians  eventually  bring  about  a  revolution?  The 
liberty  of  the  individual  is  none  too  well  secured  in 
Germany.  The  doctrine  of  lese  majeste  has  been  car- 
ried to  lengths  which  astonish  English-speaking  peo- 
ple, and  liberty  of  the  press  does  not  exist.  Will  power 
go  on  usurping  more  power,  or  will  the  people  of 
Germany  vindicate  their  rights? 


CHAPTER  XI 


THE   REMEDY 


When  a  particular  wrong  is  clearly  produced  by  a 
certain  cause,  it  has  ever  been  the  policy  of  those  who 
are  responsible  for  the  existence  of  the  wrong  and  who 
desire  its  continuance  to  direct  the  eyes  of  the  people 
to  remedies  which  are  not  effective.  This  method  has 
characterized  legislation  in  this  country  in  recent  years. 
Great  fortunes  accumulated  rapidly  by  reason  of  gov- 
ernmental favors  have  aroused  much  indignation  among 
the  people,  and  their  unrest  over  these  things  has  im- 
pressed the  leaders  of  political  parties.  Consequently 
a  few  months  ago  the  President,  in  a  speech  on  a  pub- 
lic occasion  at  Washington,  brought  forward  a  remedy 
for  these  conditions.  He  said  :  "As  a  matter  of  person- 
al conviction,  and  without  pretending  to  discuss  the  de- 
tails or  formulate  the  system,  I  feel  that  we  shall  ulti- 
mately have  to  consider  the  adoption  of  some  such 
scheme  as  that  of  a  progressive  tax  on  all  fortunes^ 
beyond  a  certain  amount,  either  given  in  life  or  de- 
vised or  bequeathed  upon  death  to  any  individual — a 
tax  so  framed  as  to  put  it  out  of  the  power  of  the 
owner  of  one  of  these  enormous  fortunes  to  hand  over 

366 


THE   REMEDY  367 

more  than  a  certain  amount  to  any  one  individual ;  the 
tax  of  course  to  be  imposed  by  the  national  and  not  the 
state  government."  In  other  words,  the  policy  of  our 
President  would  seem  to  be  to  allow  the  continuance 
of  the  tariff,  whereby  immense  sums  of  money  are 
gathered  into  the  hands  of  individuals  and  corporations, 
and  then  upon  the  death  of  millionaires  take  a  portion 
of  that  wealth  for  the  purposes  of  our  government. 
Any  such  discrimination  at  death  against  the  property 
of  men  of  great  wealth  will  imperil  the  right  of  all  men 
to  their  property.  Destroy  privilege,  and  matters  will 
adjust  themselves  aright.  It  is  in  the  interest  of  the 
poorest  man  in  the  United  States,  as  well  as  the  wealth- 
iest, that  but  one  rule  prevail  as  to  the  property  of  men, 
and  that  rule  be  one  of  justice. 

At  Cincinnati,  September  20,  1902,  President  Roose- 
velt said:  "If  in  any  case  a  tariff  is  found  to  foster  a 
monopoly  zvhich  does  ill,  why  of  course  no  protection- 
ist would  object  to  a  modification  of  the  tariff  sufficient 
to  remedy  the  evil."  Here  we  have  the  wisdom  of 
withdrawing  the  support  of  the  tariff  from  monopolies 
made  to  depend  upon  whether  the  monopoly  docs  ill. 
A  monopoly  to  control  the  prices  of  commodities,  in 
the  nature  of  our  modern  trust,  has  been  under  the 
condemnation  of  the  English  Common  Law  for  five 
hundred  years.  The  fact  that  it  was  a  monopoly  con- 
trolling the  prices  of  the  commodities  of  life  was  suffi- 
cient to  condemn  it  as  one  which  did  ill     A  stock- 


368  THE    TARIFF   AND   THE    TRUSTS 

holder  of  such  a  monopoly  who  in  a  court  either  of  law 
or  equity  attempted  to  enforce  any  rights  springing 
directly  out  of  the  contract  to  form  such  a  monopoly 
was  simply  turned  out  of  court.  This  rule  prevails  as 
to  our  existing  corporate  monopolies  in  precisely  the 
same  way  as  it  was  applied  in  the  Sugar  and  the 
Standard  Oil  Trust  cases.  It  matters  not  whether 
some  judge  or  jury  may  believe  that  the  monopoly  is 
a  blessing  to  society,  the  question  of  its  ill  effect  is  deter- 
mined solely  by  finding  that  it  is  a  monopoly  to  increase 
the  prices  of  the  necessaries  of  life.  In  a  recent  Eng- 
lish case  the  defendant  had  built  a  pier  out  into  a  navi- 
gable stream,  the  pier  being  of  great  convenience  to 
the  people.  The  jury  found  the  fact  that  the  alleged 
nuisance  had  been  erected  by  the  defendant,  but  that 
the  inconvenience  was  counterbalanced  by  the  public 
benefit  arising  from  the  alterations  thus  made.  The 
court  held  that  this  finding  amounted  to  a  verdict  of 
guilty,  and  stated  a  most  salutary  principle  in  the  fol- 
lowing language:  "In  the  infinite  variety  of  active 
operations,  always  going  forward  in  this  industrious 
community,  no  greater  evil  can  be  conceived  than  the 
encouragement  of  capitalists  and  adventurers  to  inter- 
fere with  known  public  rights  from  motives  of  personal 
interest  on  the  speculation  that  the  changes  made  may 
be  rendered  lawful  by  ultimately  being  thought  to  sup- 
ply the  public  with  something  better  than  what  it  actu- 
ally enjoys."     When  government  puts  its  hand  upon 


THE  REMEDY  369 

the  private  property  of  one  citizen  through  a  protective 
tariff  and  trust  and  turns  that  property  over  to  increase 
the  private  property  of  another  citizen,  it  is  no  longer 
free  government,  it  is  already  a  species  of  despotism, 
and  though  the  forms  of  liberty  may  continue,  the  real 
liberty  of  the  citizen  is  not  worth  a  fig. 

Now  let  us  examine  another  one  of  the  spurious, 
showy,  and  sensational  remedies  invoked  against  the 
trusts.  Everywhere  in  recent  days  those  who  have 
made  the  laws  that  brought  trusts  into  being  have  at 
the  same  time  been  passing  penal  statutes  to  punish 
them.  Persons  creating  a  monopoly  for  the  purpose 
of  controlling  the  price  of  the  necessaries  of  life  are 
criminals  under  the  common  law,  and  they  ought  to  be 
regarded  as  criminals.  Their  offence  against  society 
is  a  most  grievous  one.  It  is  right  that  they  should  be 
punished,  but  what  is  wrong  is  that  the  penal  statute 
is  brought  forward  by  politicians  and  legislators  as  the 
only  remedy  for  the  sole  purpose  of  diverting  the  peo- 
ple's attention  from  an  efficient  one.  Even  if  legislators 
in  good  faith  sought  a  criminal  remedy  against  the 
abuses  of  the  trust,  they  would  seldom  find  themselves 
successful  in  a  contest  with  the  vigilant  dexterity  of 
these  private  interests.  It  is  idle  for  the  legislator  to 
take  action  against  the  machinery  which  the  trust  uses 
to  rifle  the  public's  pocket  and  still  leave  the  cause  of 
the  trust  existing.  Such  statutes  are  the  direct  result 
of  the  action  of  demagogues  and  the  teachings  of  sen- 
24 


370  THE   TARIFF   AND   THE   TRUSTS 

sational  newspapers.  In  recent  years  they  have  been 
teaching  the  American  people  that  all  the  evils  of  our 
civilization  are  political  and  can  be  remedied  only  by 
penal  statutes.  When  the  words  of  patriotism  and 
pride  "I  am  a  Roman  citizen"  were  upon  the  lips  of 
the  great  and  virtuous  men  of  the  Roman  republic  her 
laws  were  few  and  simple  and  could  be  inscribed  on 
twelve  tables;  but  centuries  later,  when  Rome  was  a 
city  of  palaces  and  her  wealth  was  in  the  hands  of  a 
few  men  who  were  debauched  by  luxury,  the  Julian 
Law  contained  more  than  a  hundred  chapters  against 
extortion.  This  indicated  a  condition  where  the  rulers 
sought  to  restrain  by  legislation  the  passion  for  money 
which  individuals  had  lost  the  power  to  control  by 
moral  restraint.  In  our  own  country  the  multiplication 
of  penal  statutes  has  a  most  ominous  foreboding.  Some 
student  a  thousand  or  two  thousand  years  from  now 
may  be  searching  among  our  statutes  for  a  diagnosis 
of  the  maladies  which  destroyed  us,  just  as  historians 
have  seen  in  the  Theodosian  Code  the  evidence  of  the 
causes  of  Rome's  decay.  The  politicians  create  the 
conditions  out  of  which  monopolies  naturally  arise, 
and  then  attempt  to  make  political  capital  with  the  peo- 
ple by  an  attack  upon  the  very  evil  which  they  have 
created.  Newspaper  editors,  with  apparent  indigna- 
tion, assail  the  trusts  and  then  show  their  insincerity 
by  advising  the  passage  of  laws  to  punish  trusts 
which  they  know  or  ought  to  know  will  never  be  en- 


THE   REMEDY  371 

forced.  Think  of  the  ordinary  American  poHtician 
wishing  to  destroy  the  trust !  If  the  trust  was  destroyed, 
to  what  source  would  he  turn  for  his  campaign 
disbursements?  In  practical  experience  it  is  found 
that  the  public  officers  who  owe  their  positions  to  a 
party  that  has  received  campaign  disbursements  from 
the  trusts  will  not  vigorously  enforce  the  criminal  stat- 
utes against  them.  In  many  cases  the  very  official 
provided  for  the  enforcement  of  the  criminal  law  is  a 
man  who  owes  his  nomination  to  the  evil  which  he  is 
expected  to  destroy.  The  law  of  the  State  of  New 
York  for  thirty  years  has  made  the  establishment  of  a 
monopoly  to  control  the  prices  of  the  necessaries  of 
life  a  misdemeanor,  yet  I  can  recall  only  two  such 
prosecutions.  During  the  same  time  there  have  been 
actually  tens  of  thousands  of  violations  of  that  law, 
violations  which  were  open  and  above  board,  known  of 
all  men,  but  not  punished  in  the  State  of  New  York. 

Are  the  results  in  the  enforcement  of  the  Sherman 
Anti-Trust  Law  in  the  United  States  Courts  any  more 
assuring  of  the  efficiency  of  such  penal  remedies? 
Whenever  a  conviction  occurs  under  this  act  great 
prominence  is  given  to  it  in  the  newspapers,  and  we 
ought  to  know  from  these  sources  something  about  the 
number  of  criminal  convictions.  I  make  bold  to  say 
that  there  have  been  not  to  exceed  twenty  convictions 
in  fifteen  years  in  the  United  States  Criminal  Courts 
under  this  act,  and  that  those  have  been  largely  con- 


372  THE   TARIFF   AND   THE   TRUSTS 

victions  of  servants  or  inferior  agents  of  trust.  Repose 
the  power  in  district  attorneys  to  regulate  monopolies, 
and  you  will  find  eventually  that  the  monopoly  will 
regulate  its  regulators.  Repose  the  power  in  the  cen- 
tral government  to  control  the  destinies  of  these  great 
monopolies,  and  you  will  find  that  the  freedom  of  the 
individual  citizen  is  eventually  impaired.  In  the  tariff 
enacted  by  the  Australian  Commonwealth  Government 
it  is  provided  that,  in  the  event  of  it  appearing  that  the 
manufacture  or  sale  of  any  article  is  controlled  by  a 
trust,  the  Ministry  of  the  day  shall  have  the  right  and 
it  shall  be  its  duty,  by  an  executive  act,  to  temporarily 
abolish  the  protective  duties  upon  the  articles  controlled 
by  the  trust.  This  power,  however,  is  very  liable  to 
abuse.  Why  create  the  conditions  which  allow  the 
trust  to  exist  and  then  give  power  to  some  central  body 
to  either  suppress  or  not  suppress  the  trust  as  that 
power  shall  determine?  The  exercise  of  such  a  dis- 
cretion can  generally  be  controlled  in  favor  of  the  trust. 
The  intervention  of  the  United  States  government  or 
the  state  governments  into  private  business  is  a  symp- 
tom which  points  to  a  time  when  your  President  or 
your  Governor  becomes  a  "Little  Father"  who  will 
benevolently  control  all  private  and  individual  affairs, 
and  he  will  control  them  in  the  United  States  as  he 
does  in  Russia,  in  the  interest  of  the  great  and  power- 
ful and  with  indifference  to  the  welfare  of  the  masses. 
The  true  remedy  against  our  trusts  is  to  seek  out  the 


THE   REMEDY  373 

cause  of  a  trust  and  to  remove  that  cause.  This  is  a 
perfectly  simple  and  natural  remedy,  and  lies  close  at 
hand.  It  applies  to  public  matters  the  same  rule  of 
wisdom  which  men  apply  in  their  own  affairs  as  to 
health,  business,  and  every  private  transaction  in  the 
world.  If  typhoid  fever  or  some  other  epidemic  is 
sweeping  over  your  community  and  you  find  that  it 
results  from  sewage  or  some  other  physical  cause,  you 
will  remove  the  cause  and  not  rely  solely  upon  the  skill 
and  remedies  of  medical  practitioners.  Some  visitors 
who  were  being  shown  over  a  pauper  lunatic  asylum  in- 
quired of  their  guide  what  method  was  employed  to 
discover  when  the  inmates  were  sufficiently  recovered 
to  leave. 

"Well,"  replied  he,  "you  see,  it's  this  way.  We  have 
a  big  trough  of  water  and  we  turns  on  the  tap.  We 
leave  it  running,  and  tells  'em  to  bail  out  the  water  with 
pails  until  they've  emptied  the  trough." 

"How  does  that  prove  it  ?"  asked  one  of  the  visitors. 

"Well,"  said  the  guide,  "them  as  ain't  idiots  turns 
off  the  tap." 

Throw  down  the  tariff  wall  which  encircles  every 
trust  which  is  selling  its  domestic  product  at  high 
prices,  and  at  the  same  time  selling  in  foreign  markets 
at  lower  prices  than  at  home,  and  let  the  trust  contend 
with  the  full  stream  of  international  commerce.  If  it 
continues  to  exist,  it  will  be  because  it  sells  its  products 
at  home  for  cheaper  prices  than  the  cost  of  the  im- 
ported foreign  product. 


374  THE    TARIFF    AXD   THE   TRUSTS 

The  trusts  control  a  considerable  proportion  of  the 
politicians,  legislators,  and  newspapers  in  this  country 
to-day.  They  are  allied  with  the  banking  interests, 
give  millions  to  charity,  and  are  debauching  the  Ameri- 
can conscience  through  their  campaign  gifts.  But 
slavery  in  the  fifties  ruled  the  country  almost  as  ef- 
fectively, and  when  it  stood  at  the  very  brink  of  war 
and  disaster,  it  was  apparently  at  the  very  height  of  its 
power.  Read  the  history  of  How  England  Got  Free 
Trade  and  you  will  see  how  this  giant  evil  can  be  de- 
stroyed. The  people  must  be  aroused  to  the  danger 
to  their  liberties  as  well  as  to  their  property  from  pro- 
tective tarififs  and  trusts.  Our  democratic  govern- 
ment needs  to-day  leaders  burning  with  indignation 
and  horror  at  the  injustice  of  this  legalized  robbery  of 
the  people.  We  need  agitators  like  Garrison  and  Phil- 
lips, like  Cobden  and  Bright,  who  hate  in  their  hearts 
and  with  all  the  loathing  of  their  souls  this  cruel  in- 
justice. The  people  in  each  locality  should  be  or- 
ganized into  patriotic  societies  pledged  to  vindicate 
their  rights  against  these  oppressive  trusts.  Such  an 
organization  cannot  be  accomplished  by  men  acting 
within  the  lines  of  existing  parties.  The  whole 
party  machinery  is  prepared  and  perfected  with  the 
idea  of  destroying  the  exercise  by  the  people  of  any 
influence  in  the  control  of  government.  The  political 
boss  of  a  party  in  county,  state,  or  nation  practically 
nominates  his  candidates  for  oflfice  before  the  delegates 


THE   REMEDY  375 

to  conventions  are  elected.  The  delegates  come  to- 
gether in  convention  simply  to  ratify  his  selection. 
The  same  methods  prevail  in  both  parties,  and  when 
the  people  come  to  vote  it  is  simply  a  choice  between 
the  boss  of  one  party  who  is  the  tool  of  corporate  in- 
terests and  the  boss  of  the  other  party  who  is  also  a 
tool  of  corporate  interests,  and  the  candidates  of 
either  party  as  a  rule  leave  small  choice  to  the  voter. 
What  a  happy  condition  it  would  be  if  we  possessed 
a  few  thousand  men  as  loyal  to  the  interests  of  their 
country  as  the  politician  is  to  his  party!  This  would 
be  the  thinking  patriotism  upon  which  the  German 
prides  himself.  The  story  goes  that  Napoleon  and  the 
King  of  Prussia  were  talking  of  the  respective  merits 
of  their  soldiers  when  Napoleon  boasted  that  the 
French  soldier  was  the  most  patriotic  in  all  Europe. 
The  Prussian  King  denied  this.  "Ah,  let  us  see," 
cried  Napoleon,  and,  summoning  one  of  his  guardsmen, 
he  ordered  him  to  jump  out  of  a  window  which  was 
forty  feet  above  the  ground.  The  guardsman  saluted 
and  jumped  into  eternity.  Whereupon  the  King  of 
Prussia  ordered  one  his  common  soldiers  to  do  the 
same  thing,  but  the  German  drew  himself  up  and 
asked,  "Is  it  for  the  Fatherland?"  Receiving  the 
answer,  "No,  it  is  for  myself,"  he  turned  on  his  heel 
and  said:  "Then  I  will  not  do  it."  Within  the  last 
few  years  a  young  politician  in  New  York,  of  kindly 
and  generous  nature,  on  the  morning  of  the  day  ap- 


37^  THE   TARIFF    AND   THE   TRUSTS 

pointed  for  his  trial  on  an  indictment  for  a  criminal 
offence  jumped  from  the  window  of  his  apartment 
to  death,  and  the  newspapers  declared  that  he  did  it  to 
prove  his  loyalty  to  other  politicians  associated  with 
him.  I  know  not  how  this  may  be,  but  this  I  do  know, 
that  if  men  were  one-half  as  loyal  to  their  country  as 
they  are  to  party  chiefs,  such  abuses  as  I  have  described 
in  these  pages  could  never  have  continued  for  forty 
years.  The  people  have  been  following  the  leader- 
ship of  politicians  for  so  many  years  that  they  have 
lost  to  some  extent  the  power  of  initiative,  and  though 
the  forms  of  a  democratic  government  exist,  the 
spirit  of  democracy  has  fled.  Again,  political  parties 
do  not  even  differ  on  great  public  questions,  and  they 
regard  such  questions  only  as  instruments  of  political 
advancement.  The  vital  force  of  the  two  existing 
parties  has  been  greatly  impaired  by  reason  of  the 
loss  of  faith  on  the  part  of  their  leaders  in  the  common 
sense  and  good  judgment  of  the  voters.  These  leaders 
have  come  to  believe  that  the  few  are  wise  and  the 
many  are  ignorant.  On  the  contrary,  die  hugest 
wrongs  and  crimes  in  the  annals  of  the  race,  the  wars 
that  have  wasted  the  world  and  desolated  mankind 
have  been  the  work  of  the  ruling  minority  and  not  of 
the  masses  of  the  people.  The  people  are  very  much 
wiser  than  the  politicians  believe  them  to  be.  The 
party  of  the  future  which  will  do  away  with  the  usurpa- 
tions of  government  must  have  the  courage  and  the 


THE   REMEDY  377 

wisdom  to  plant  itself  on  the  unerring  instinct  of  the 
masses  of  the  people.  "The  mind  of  a  people  may  be 
considered  as  a  great  mind  made  up  of  millions  of  units, 
each  almost  insignificant  if  taken  separately,  but  in 
most  cases  unerringly  logical  when  acting  as  a  whole. 
The  instinct  of  a  great  people  is  as  logical  as  the 
instincts  of  a  wild  animal."  What  the  people  need 
to  see  is  that  the  power  which  is  bestowed  on  party 
managers  is  just  so  much  power  subtracted  from  the 
just  authority  of  the  mass  of  the  citizens,  and  that  party 
leadership  as  it  exists  to-day  is  anti-democratic  in 
all  its  tendencies.  The  creed  that  good  becomes  evil 
if  carried  on  under  one  party  and  evil  good  if  carried 
on  under  another  is  not  calculated  to  bring  into  life 
great  civic  virtue  or  moral  perception,  and  if  free  gov- 
ernment is  saved  in  this  country,  it  will  be  saved  by 
men  who  will  break  with  their  party  a  hundred  times 
over  rather  than  see  a  continuance  of  the  condition 
where  vast  wealth  controls  government,  dictates  the 
policies  of  parties,  and  takes  unjustly  from  the  citizen 
his  hard-earned  money  to  increase  its  millions. 

What  we  must  have  in  this  country  if  its  institu- 
tions are  to  be  saved  is  a  rebirth  of  patriotism.  The 
patriotism  which  we  need  is  of  an  entirely  different 
quality  from  that  which  demagogues  describe.  Like 
the  Chinese,  we  have  been  indulging  so  long  in  ex- 
ultation over  our  greatness,  we  are  instructed  so 
thoroughly  in  the  idea  that  our  form  of  government 


378  THE   TARIFF    AND   THE   TRUSTS 

is  perfect,  that  we  have  come  to  believe  that  somehow 
it  will  perpetuate  itself,  and  that  we  may  without  fear 
of  invasion  of  our  rights  go  to  sleep.  Constitutions 
however  wise  or  laws  however  good  will  not  perpetu- 
ate liberty.  The  Declaration  of  the  Rights  of  Man 
did  not  save  from  death  a  single  one  of  the  innocent 
citizens  dragged  before  the  French  Revolutionary 
Tribunal,  nor  did  the  American  Declaration  of  In- 
dependence, with  its  proclamation  of  the  inalienable 
rights  of  man,  deliver  a  single  negro  from  slavery. 
Let  it  become  the  fashion  of  the  new  patriotism  to 
bravely  tell  the  facts  against  us  as  well  as  for  us.  Let 
us  see  our  faults  while  we  hug  our  virtues.  Self-com- 
placent dreams  of  sanguine  optimism  blind  us  to  the 
real  duties  of  patriotism.  Although  our  people  are 
made  up  of  all  the  races  of  the  world,  the  demagogue 
has  made  capital  with  them  by  attempting  to  create 
prejudice  against  foreigners  and  to  attain  his  object 
in  that  way.  After  the  expulsion  of  all  other  Euro- 
peans from  Japan  two  hundred  years  ago  the  Dutch, 
as  every  student  well  knows,  were  allowed  to  retain 
a  trading  settlement  in  the  Island  of  Nagasaki,  but 
they  were  regarded,  as  ignorant  and  bigoted  people 
are  apt  to  regard  foreigners,  with  suspicion,  and  it 
was  dangerous  to  be  friendly  to  them.  It  was  taken 
for  granted  that  a  friend  of  foreigners  must  be  an 
enemy  to  his  native  land.  Hence  to  overcharge  a 
Dutchman  or  to  cheat  and  defraud  him  was  looked 


THE   REMEDY  379 

Upon  as  a  patriotic  act.  Just  so  the  demagogue,  when 
you  seek  to  reheve  the  people  from  the  burdens  of 
trusts  resulting  from  the  tariff  on  foreign  imports, 
cries  out  that  you  are  acting  in  behalf  of  foreigners, 
that  you  are  influenced  by  English  gold,  and  there 
are  not  a  few  people  in  this  country  who  are  affected 
by  such  words.  Indignation  at  the  existence  of  wrong 
is  an  essential  element  of  patriotism.  When  Dr. 
Franklin,  as  agent  for  the  colony  of  Pennsylvania, 
was  a  witness  before  a  Committee  of  the  English 
House  of  Commons  considering  the  duties  imposed 
upon  imports  to  the  colonies,  one  of  the  members 
said  to  him  :  "You  cannot  get  along  without  our  woolen 
goods,  you  must  have  them."  "We  can  get  along 
without  them,"  responded  Dr.  Franklin  indignantly. 
"And  how  can  you  get  along  without  them?"  said  the 
member.  "We  will  eat  no  more  lamb,  we  will  grow 
our  own  wool,  we  will  make  our  own  woolens."  These 
words  were  the  expression  of  the  true  American 
spirit  which  gave  birth  to  free  government  on  this 
continent.  Can  the  Sons  and  Daughters  of  the  Revo- 
lution find  any  better  field  for  patriotic  labor  than  in 
seeking  a  rebirth  of  the  patriotism  which  will  free  our 
country  from  a  burden  a  hundred  times  more  oppres- 
sive than  the  slight  taxes  which  led  to  the  Revolution- 
ary War?  Let  men  in  all  walks  of  life  gather  into 
societies  and  cultivate  a  new  patriotism  without  which 
the  spirit  of  liberty  will  be  destroyed  in  this  country. 


380    ^  THE   TARIFF   AND   THE   TRUSTS 

Let  the  people  come  together,  not  as  Republicans  nor 
as  Democrats  but  as  Americans  loving  their  country 
and  ready  to  join  battle  against  the  interests  which 
corruptly  rule  it.  There  is  no  other  question  of  im- 
portance before  the  country.  It  is  simply  a  fight  at 
close  quarters  between  the  people  and  this  mighty  sys- 
tem of  wrong  and  corruption.  In  order  that  such 
patriotic  societies  should  be  beneficial,  their  chief  ob- 
ject must  be  the  discussion  of  public  questions.  Thirty 
or  forty  years  ago  men  had  convictions  upon  public 
questions  and  felt  intensely  over  them.  At  every 
cross-road  and  village  hamlet  throughout  the  land 
you  would  find  men  whittling  sticks  and  talking  poli- 
tics, and  often  the  opinions  of  that  class  of  men  were 
quite  as  sound  upon  public  questions  as  those  of  their 
representatives  in  Congress.  Our  exclusive  atten- 
tion in  these  days  to  the  newspapers,  with  their  myriad 
disconnected  items  of  fact  and  fancy,  tends  to  blind 
us  to  the  importance  of  great  events,  upon  which  may 
hang  the  whole  future  of  our  civilization.  Our  peo- 
ple are  ceasing  to  be  jealous  of  the  infringement  of 
their  liberties,  and  are  becoming  altogether  absorbed 
in  one  end,  the  making  of  money.  Establish  in  each 
village  and  hamlet  in  this  country  a  debating  society 
where  everyone  can  meet  and  discuss  public  questions, 
and  you  will  do  more  to  destroy  the  existence  of  the 
boss  and  the  corruption  of  public  life  than  in  any 
other  possible  way.     The  door  to  such  a  society  should 


THE   REMEDY  381 

be  as  wide  as  humanity.  Hear  not  only  wise  men, 
but  fools,  upon  every  subject,  and  if  the  debate  does 
not  enlighten  it  will  surely  benefit  the  debaters,  and 
when  you  have  reached  conclusions  upon  the  justice 
or  injustice  of  our  protective  system,  send  delegates 
to  a  general  convention  and  frame  your  demands  upon 
political  parties.  Give  no  support  to  the  party  which 
will  not  specifically  agree  to  your  propositions  in  its 
platform.  A  platform  dealing  in  political  generalities 
is  not  to  be  relied  on.  It  is  idle  to  call  our  tariff  a 
robber  tariff,  and,  after  the  people  have  sustained  you, 
disappoint  their  hopes  by  enacting  a  high  tariff  Wilson 
Bill.  For  at  least  twenty  years  the  producers  of  every 
product  now  made  by  the  United  States  Steel  Corpora- 
tion, with  the  exception  of  tin  plate,  have  been  able  to 
produce  them  cheaper  than  their  foreign  competitors. 
Yet  during  all  that  period  those  producers  have  en- 
joyed protection  in  the  amount  of  about  50  per  cent, 
upon  their  products,  and  have  unjustly  taken  from 
the  American  people  billions  of  dollars.  The  duties 
on  iron  ore,  pig  iron,  steel,  tin  plate,  wool,  woolen  and 
cotton  cloth,  hides,  sole  leather,  borax,  lumber,  paper, 
lead,  refined  sugar,  salt,  and  chemicals  should  be  re- 
pealed, and  unless  a  political  party  in  its  national  plat- 
form will  specifically  agree  to  repeal  those  duties,  the 
people  should  refuse  to  support  its  candidates  and 
should  meet  in  national  convention  and  nominate  their 
own  candidates.     Support  no  Congressman  who  will 


382  THE   TARIFF    AND   THE   TRUSTS 

not  specifically  agree  in  writing  to  repeal  these  duties. 
A  considerable  organization  of  citizens,  having  no 
other  motive  than  the  public  welfare,  refusing  to  act 
within  party  lines  and  giving  its  support  only  to  that 
party  which  specifically  agrees  to  vote  for  the  public 
purposes  declared  to  be  beneficial  by  such  an  organiza- 
tion, can  make  itself  all-efficient  in  remedying  present 
conditions.  An  organization  of  this  kind  formed 
within  either  party  to  influence  i*^s  action  will  efifect 
very  little.  Every  Congressman  feels  that  the  power 
exercised  by  political  parties  in  practically  fixing  the 
price  of  the  necessaries  of  life  through  tariffs  is  a 
power  which  he  cannot  afiford  to  part  with,  and  he  will 
continue  to  use  this  power  for  the  benefit  of  great 
corporations  until  he  sees  that  the  people  are  in  earnest 
and  determined  to  have  their  rights.  The  way  for 
the  people  to  secure  those  rights  and  to  perpetuate 
free  government  is  to  insist  upon  and  obtain  in  both 
state  and  national  government  the  right  to  the  Refer- 
endum. For  many  years  by  the  provisions  of  the 
Swiss  law  important  public  questions  have  been  sub- 
mitted to  the  people  for  their  direct  determination  by 
ballot.  The  traveler  through  the  mountain  passes  in 
Switzerland  will  find  in  many  villages  liberty  halls 
where  the  people  assemble  and  discuss  these  public  ques- 
tions. The  Referendum  is  the  cause  of  this  discussion. 
If  we  would  stimulate  discussion  upon  public  questions 
and  preserve  our  free  institutions,  the  attention  of  the 


THE   REMEDY  383 

people  must  be  directed  not  to  political  parties,  not  to 
party  leaders,  but  to  the  merits  of  proposed  legisla- 
tion ;  and  no  way  will  be  found  more  efficient  to  at- 
tain this  end  than  the  direct  submission  to  the  people 
of  important  laws.  Submit  directly  to  the  people 
the  question  of  the  continuance  of  the  Dingley  Tariff, 
give  them  an  opportunity  to  discuss  among  themselves 
the  matter  upon  its  merits  and  take  their  decision 
thereon  unaffected  by  allegiance  to  political  parties, 
and  the  great  mass  of  the  people  would  vote  against 
this  system  wdiich  extorts  hundreds  of  millions,  if  not 
billions,  of  dollars  each  year  from  their  hard  earnings, 
May  the  people  see  their  danger  and  wage  a  successful 
battle. 


INDEX 


Agrarians,    348-3S2- 
American  Brass  Co.,  76. 
American   Hide   and    Leather    Co., 

79- 
American    Linseed    Co.,   75. 
American    purchasers    of    English 

tramp    ships,    93,   94. 
American    shipping,    decadence    of, 

107-109. 
American   Thread   Co.,   76. 
American  Woolen  Co.,   77. 
Anthracite   coal,    75,    note. 
Anti-Corn   Law   League,   303,    304, 

306-309;     activity     of,     321-323; 

329. 

Balance  of  trade  theory,  its  ori- 
gin,   298. 

Beef  Trust,   39,   138. 

Bismarck,  a  free  trader,  336,  338, 
339;  reasons  for  adopting  pro- 
tection, 339-342;  result  of 
change,    343,    344- 

Boots    and   shoes,   39,   40. 

Borax  Trust,  63-65. 

Bright  John,   315,   320,  321. 

Buying   votes,    124,   125. 

California  Fruit  Canners'  Asso- 
ciation,   77. 

Calumet  and  Hecla  Mining  Co., 
279-281. 

Canadian  and  American  Manu- 
facturers* Associations,  tyranny 
over   retailers,   67-70. 

Caprivi,  negotiates  commercial 
treaties,  344,  345;  results  of, 
348. 

Cement,   41. 


Centralization  of  government,  re- 
sults   from    tariff,    134-137,    372. 

Chartists,  308,  309;  riots  317, 
318. 

China,  exports  to,  148,  149;  J.  J. 
Hill's    comment,    169-171. 

Cobden,  early  life,  305,  306;  work 
against  the  Corn  Laws,  311, 
313,  314;  attack  on  Peel,  318- 
320. 

Competition,  opinions  on  by 
Sherman,  58;  Blaine,  58;  Car- 
negie,   58. 

Congressmen  and  the  Trusts,  220, 
221. 

Corruption  fostered  by  tariffs, 
117-124;  as  to  newspapers,  130, 
131;  business  men,  131-,  132; 
beneficiaries,    140-145. 

Cotton,    24,    158,   259,   265. 

Cotton    Oil    Trust,    78. 

Cummings,  Governor,  on  Dingley 
Tariff,   3. 

Diamond  Match  Co.,  66,   76. 
Dingley     Tariff,    high    prices,     17, 

18,    19. 
Discussion,    suppression     of,     145- 

147. 
Druggists,     National     Association, 

66. 
Duties,  effect  of  specific  upon  the 

poor,  25-28,  208,  209;  excessive, 

42. 

Embargo  of   1808,   256. 
Emerson    on   protection,    168,    169. 
Enemies  of   the    Republic,    127. 
English    Custom   Laws,    299-30i- 


384 


INDEX 


English  iron  masters'  petition  for 
free  iron   in   1756,   249,  251. 

Englisii  laborers,  condition  before 
repeal  of  Corn  Laws,  314-31/1 
324,  326. 

Expatriation  of  American  indus- 
tries, 173-175;  of  German  in- 
dustries,   355. 

Exports,  comparative  of  manu- 
factures of  Great  Britain,  Ger- 
many, France  and  U.  S.,  100- 
loi,    169,    206,    207. 

Exports  to  Germany,  Convention 
of   1900,  346. 


Famine  in  Ireland,  327. 

Farmers,  manufacturers  before 
the  war,  222;  exporters,  223, 
224;  deceptive  protection  for 
them,  224-228;  comparative  size 
of  farms   in   U.    S.   and    Europe, 

229,  230;    cost    of    farm    labor, 

230,  231;  exports  reduced  by 
tariff,  231,  233;  burdens  in- 
creased, 44,  234-238;  pauper 
labor  argument,  238-240;  pros- 
perity argument,  240,  241 ;  pros- 
perity from  1850-1860  under 
Free  Trade,  242,  243;  condi- 
tion under  Wilson  Tariff,  243, 
244;  land  trust  of  the  railways, 
245,  246. 

Fertilizer  Trust,   78. 

Feudal    System   of  the   Tariff,   42, 

43- 

Financial  Depressions,  of  1837, 
261-264;  of  1857,  273,  274;  of 
1893,  294,   295. 

Flour    Mills,    159,    160. 

Food,  horseflesh  in  protected 
countries,    213,    214. 

Fcreign-built  ships,  registry  for- 
bidden, 90-93;  Cleveland's  com- 
ment, 95,  96;  New  England's 
agency,    96,    97. 

Forests,    destruction    of,    62,    160. 

Franco-German  War,  evil  effects 
of    indemnity,    337- 


Free    raw    material,  148,    150-154, 

158. 

Free    Trade    fosters  shipping,    102- 

106;    England   an  example,    112- 

iiS- 
Fruit  growers,  228,  229. 
French    treaty,    163-165. 

German  tariffs,  of  the  18th  Cen- 
tury, 333,  334;  the  Zollverein 
335,  336;  reductions  of  1873 
and  187s,  338;  of  1879,  342;  oi 
1903,    352-355- 

German  tariff  war  with  Russia, 
346. 

Germany,  trusts,  355,  356;  con- 
dition of  agriculture  and  farm 
laborers,  356-362;  of  operatives, 
360,  361;  chemical  industry, 
362;  similarity  to  England  be- 
fore the  repeal  of  the  Corn 
Laws,    364,   365. 

Gladstone,  completes  Peel's  work, 
331,    332- 

Glass  Trust,   37-39,   77- 

Glucose   Trust,    77- 

Great  Britain,  trade  policy  toward 
our  colonies,  248,  249;  recent 
growth  in  wealth,   331,   332. 

Hamilton  Tariff,  5. 
Hardware,  40,  41. 
Harrisburg   Convention,   259. 

Imports    mean    exports,    171.    172- 

Indirect  taxation,  burdens  upon 
the  poor,  44-46,  216,  217,  289- 
291;  results  in  surplus  and 
deficit,  132;  public  extravagance, 
133,    134;   tariff   wars,    134- 

Infrnt  industries,  woolen,  21,  22; 
cotton,  24,  25;  silk,  25;  iron 
and  steel,  28,  29. 

Internal    taxes,    275,    276,    283. 

International   Harvester  Co.,  76. 

International    Paper    Co.,    59-63- 

Iron    and   steel,    28-33. 


25 


38s 


INDEX 


Labor,  under  high  and  low  tariffs, 
183-206;  no  tariff  upon,  212; 
condition  in  protected  coun- 
tries, 213,  214;  changed  con- 
dition since  1842,  215,  216;  un- 
der  Free   Trade,  218. 

Lead    and    chemicals,    158. 

Living,  increased  cost  of,  17,  18, 
44.    45.    207,    208,    234-238. 

Lumber,  41,  42. 

Machinery   Trust,    78. 

McKinley    Tariff,    289-291. 

Marble,  duty,   283. 

Manufacturers  as  U.  S.  Senators, 
127-130. 

Manufacturing,  our  superiority, 
6-13;  Leroy-Beaulieu's  com- 
ment, 15-17,  cheapness  of  our 
iron  and  steel,  29,  30,   175,    176. 

Meat  Trust,   74,   39,    138. 

Milk    Sugar    Trust,    76. 

Mills    Bill,    289. 

Monopolies,  early  English,  297, 
298. 

Morrill    Tariff,    5,   275,   276. 

Morrison   Bill,   288. 

National    Biscuit    Co.,    67. 

National   Lead   Co.,   75. 

Natural    resources    of    U.    S.,    14, 

15.    149.    ISO. 
Navigation  Act,   English,   110,  iii. 
New    England   industries,    160-163, 

180. 
New   York,   anti-trust  law,   so,   51. 
Nickel,   duty,    283. 
Non-competing    imports,     removal 

of,  285. 

Panama  Canal  Commission,  pur- 
chases,  70,   71. 

Peel,  Sir  Robert,  Prime  Minister, 
310,  311;  income  tax  and  repeal 
of  duties  on  raw  materials  in 
1842,  312,  313;  removal  of 
duties  in  1845,  335;  repeal  of 
Corn    Laws,     328-330;     resigna- 


tion, 330;  words  on  resigning, 
219. 

Pitt,  William,  policy  toward 
colonies,    252,   299. 

Plate   Glass  Trust,  37,  38,   6s,  66. 

Presidential  campaign  of  1888, 
289. 

Protection,  not  demanded  by  la- 
bor cost,  209,  210;  exceeds 
whole     labor    cost,    210-212. 

Protection  and  Patriotism,  137- 
140. 

Protection,  opinions  upon  by 
Hamilton,  253,  254;  Madison, 
254;  Jefferson,  253;  Clay,  256; 
Webster,  257;  John  Randolph, 
258;    Calhoun,    259. 


Remedies,  penal,  their  futility, 
369-372;  removal  of  causes, 
372.  373;  true  patriotism,  374, 
375.  377-379;  destruction  of 
party  government,  376,  377; 
public  discussion  and  referen- 
dum,   380-383. 

Rotten    boroughs.    30  j,    302. 

Russell,     Lord     John,     defeat     of 


Ministry,      310, 
trader,   328. 


311; 


free- 


free    raw 


Sargent,    John    B.,    on 

material,     154-156. 
Ships,   comparative   cost   in    L^.    S. 

and    Etirope,    97-100. 
Ship    subsidies,     109. 
Silk,    25. 
Socialism,    resulting     from    trusts, 

81-84;       from      German      tariffs, 

85,   363,   364;  in  the  U.   S.,   85. 

86;     inconsistent     with     English 

law,   87. 
Standard   Oil    Co.,  74.   75.   note. 
"Stand-patters,"    43,    44- 
State  tariffs  under  the  Federation, 

Pennsylvania,    249,    New    York, 

252.    253- 
Steel  rails,   30-33,   282. 


386 


INDEX 


Sugar,    36,    37,    49.    67,    75.    i6s- 
167,    292,    393,    325. 


Tariflf  Commission  of  1882,  285, 
286. 

Tariffs,  of  1789,  253-255;  of  i8i6, 
256;  of  1824,  258,  259;  of  1828, 
259,  260;  of  1832  and  1833, 
261;  of  1842,  266;  of  1846,  267- 
273;  of  July  14,  1862,  275;  of 
June  30,  1864,  275-277;  of  1867, 
278;  of  1872,  283,  284;  of  1883, 
286-288;  of  1890,  289-291;  of 
1894,    291-294. 

Tariffs  written  by  manufacturers, 
126. 

Tin    Can    Trust,    78. 

Tin   Plate,    34-36. 

Tobacco   Trust,   66. 

Trusts,  ancient,  47-49;  result 
from  tariff,  51-54;  instability 
of  prices,  54,  55,  177-179;  in 
England,  55,  56,  57;  number 
of,  79;  alleged  reasons  for,  79, 
80;  in  America  and  Europe, 
80;  "a.  monopoly  which  does 
ill,"    367-369. 


United    Lead    Co.,    75. 

U.  S.  Steel  Corporation,  home 
and  foreign  prices,  32-34; 
structural  steel,  41;  trust,  71- 
74;   see   Iron  and    Steel   rails. 

Wages,  under  high  and  low  tar- 
iffs, 195-198;  Farquhar's  com- 
ment, 156;  tariff  does  not 
make  high  wages,  182-188; 
comparison  between  protected 
and  unprotected  industries,  192- 
194;  true  measure  of  day's 
wage,   207,    208. 

Wages  in  free-trade  England 
and  protected  Europe,  188-190, 
192. 

Wages  in  free-trade  New  South 
Wales  and  protected  Victoria, 
192. 

Walker  Tariff,  prosperity  under, 
268-273. 

War   of    1812,    256,    257. 

Watch   Trust,    67. 

Wells,    David   A.,   277. 

Woolens,  tariff,  19-23,  157,  158, 
259,  Syracuse  Convention,  278; 
increased    duties,    278,   279. 


387 


THE     PLAIN     FACTS     AS    TO    THE 


TRUSTS   AND  THE   TARIFF 


WITH      CHAPTERS      ON      THE     RAILROAD 
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